Sperling doesn’t expect double-dip recession

White House economic advisor Gene
Sperling dismissed fears that the US could face another
recessionary slump on Sunday.

He was “not worried the US will have a double-dip recession,” he said on Fox News Sunday.

Sperling also said “serious discussions” were underway on efforts to
reach a deal to reduce the deficit and raise the debt-ceiling by an Aug. 2
deadline.

{mosads}While Sperling would not share details on the plan underway,
both sides were “approaching the final hour.”

He sounded a note of optimism about prospects. “If there’s a
will there are multiple ways to get there,” he said. But he also stressed that “important
details need to be worked out.”

In his comments, Sperling said the White House was committed
to seeing three basic conditions in the final agreement: a “down payment on
deficit reduction,” tax reform and an “action forcing event” or “enforcement mechanism”
to compel lawmakers to make future spending cuts.

Those conditions mirror the terms of the proposal believed
to be under discussion.

Earlier Sunday on CNN, Senate Minority Leader Mitch
McConnell said both sides were close to a $3 trillion deficit-reduction
package.

The package is expected to include spending cuts of about $1
trillion and set up a select bicameral committee to recommend a second
deficit-reduction package worth between $1.4 trillion and $1.8 trillion by
Thanksgiving.

If Congress fails to approve the committee’s recommendations, cuts to Defense
and Medicare would go into effect automatically, giving both parties added
incentive to reach a later agreement.

While refusing to go into specifics. Sperling said the
Treasury Department had a “contingency plan” to handle making payments in the
event lawmakers and the White House cannot reach a deal.

Sperling added that the “uncertainly” from the prolonged
debt-ceiling debate was a “self-inflicted wound” on the economic recovery but
expressed optimism that a deal could be reached by the Aug. 2 deadline.

“It ain’t over ‘til it’s over,” Sperling said.

The Treasury Department forecasts that the US will be unable
to pay all its bills beginning on Aug. 3 if lawmakers and the White House fail
to reach a deal to raise the nation’s debt-ceiling.

Senate Majority Leader Harry Reid (D-Nev.) delayed a vote on
his plan to raise the debt ceiling late Saturday to give President Obama and
GOP leaders more time to strike an agreement.

In a symbolic vote, House Republicans resoundingly rejected
a version of Reid’s debt plan in a 173-246 vote.