Recession, Federal Deficit | featured news

Congressional leaders of both parties will meet with the president in an effort to reach a deal to avoid across-the-board tax increases and spending cuts that could push the economy into recession.

The federal deficit will hit $1.3 trillion for fiscal 2011, the third consecutive year of record shortfalls and an emerging campaign theme for GOP attacks on President Obama and congressional Democrats. The deficits of the last three years are at levels unseen since World War II and stem from the "long shadow" cast on the economy by the financial crisis and recession, the Congressional Budget Office said Wednesday.

On a chilly evening in February, a commuter train bound for Worcester, Mass., broke down outside Boston, transforming passengers' usual 80-minute commute into a four-hour nightmare.

Treasury Secretary Timothy Geithner warned in a letter to Congress that failure to raise the $14.294 trillion debt ceiling would drive up interest rates, push down household wealth, put more pressure on federal entitlement programs and cause a double-dip recession.