The debate will be in the forefront when Congress returns on Monday from a nine-day recess, now facing a Friday deadline for roughly $85 billion in automatic, deficit-reduction spending cuts.
President Barack Obama and congressional Democrats suggest too much austerity now could threaten the recovery and damage the nation's social safety net. They support some spending cuts but also want higher revenues from closing tax loopholes.
Republicans, who control the House, insist on tackling deficits with spending cuts alone.
Neither side is optimistic a deal can be forged in the few remaining days. Obama's Thursday phone calls to Congress' top two Republicans—House Speaker John Boehner and Senate Minority Leader Mitch McConnell—produced no breakthrough.
The potential shock to the economy comes at a time of sharply rising gasoline prices and a slowdown in consumer spending probably caused by the Jan. 1 increase in Social Security payroll taxes affecting nearly all workers.
Nationwide, the average price of gas was $3.78 a gallon Thursday, according to the AAA, an increase of 47 cents a gallon in just the past month.
Meanwhile, the White House continued its daily recital of horror stories from the looming spending cuts.
National parks, military programs and the jobs of FBI agents, firefighters, federal prosecutors and government researchers are all on the chopping block.
On Friday, Transportation Secretary Ray LaHood sounded the alarm, telling a White House briefing air traffic controllers would be among the first furloughed.
He predicted major flight delays and cancellations over "the next 30 days." A Republican, LaHood urged his former GOP House colleagues to help.
"This is not rocket science," he said.
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