The White House and Congress must agree on how to cut the US budget deficit in the next 60 days or risk a recession in the United States that would also grip Canada, Canada’s finance minister said Wednesday.
Newly re-elected US President Barack Obama will soon face a showdown with Republicans on Capitol Hill over the so-called “fiscal cliff” — a year-end perfect storm of a budget crunch and expiring tax cuts.
“Were the entire ‘fiscal cliff’ risk to become reality, the effect on US GDP, according to the Americans themselves, would be four to five percent, which would put the US economy into recession quite quickly and the Canadian would follow shortly thereafter,” Canadian Finance Minister Jim Flaherty told reporters.
“We’re all concerned that it’s an immediate problem within the next 60 days that needs to be dealt with,” he said, referring to G20 leaders who hope American lawmakers will reach a deal on budget legislation.
Canada will follow if US goes off 'fiscal cliff': Flaherty
