As the nation slowly recovers from the severe 2007-2009 recession, a battle rages between lawmakers who want the government to aggressively tackle deficits with spending cuts and those who caution the economy is still too frail to stand on its own feet.
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.