The co-chairman of the famed tax and spending Simpson-Bowles commission said Wednesday that it appears the nation is headed over the "fiscal cliff," and that could lead to 9 percent unemployment, two million firings, a slash in economic growth up to 5 percent and a new recession.
"That will lead to chaos," said Erskine Bowles, the Democratic half of the commission.
Speaking to reporters at a breakfast hosted by the Christian Science Monitor, Bowles said that after meeting with the president, congressional lawmakers and the business community, there is just a one-third possibility that the White House and Congress will cut a deal in time to stave off huge tax increases and spending cuts slated to begin Jan. 1.
"We are going over the cliff. I think that will be horrible," he said.
Bowles added that besides crushing the slowly improving economy, even a short ride over the cliff could result in a downgrade of U.S. debt. (Read more about the breakfast in The Examiner's Beltway Confidential.)
He said if no deal is made and the economy crashes, he expects that "people will come to their senses very quickly."
Alan Simpson, the Republican on the commission that generated an outline on how to save the economy and social programs, said that the tipping point if no deal is made could come soon, possibly within three months.
And both dismissed talk by the right and left wing of no compromise. Simpson, for example, said the GOP has to give up its goal of first winning an amendment to balance the budget, and Bowles said that Democrats have to give on entitlement programs like Medicare and Social Security.
But Bowles added that he senses the moderates in both parties are open to a deal and he specifically said that President Obama isn't wedded to a major tax rate increase on the wealthiest top 2 percent. "I didn't sense it, I heard it ... from the president," he told reporters.
He urged lawmakers to stop taking days off for holidays like Christmas and Thanksgiving and deal with the reality of economic collapse. "If we go over this fiscal cliff, you have bet this country," he charged.
