There’s common agreement that lawmakers will act either late this year or early next year to head off the dramatic shift in the government’s financial situation. But if they were left in place, CBO says it would wring hundreds of billions of dollars from the budget deficit that would “represent an additional drag on the weak economic expansion.”

CBO projected that the economy would contract by 1.3 percent in the first half of 2013, which would meet the traditional definition of a recession, which is when the economy shrinks for two consecutive quarters.

“Such a contraction in output in the first half of 2013 would probably be judged to be a recession,” CBO said.

At issue is the full expiration of two rounds of major tax cuts enacted during the Bush administration and automatic spending cuts on the Pentagon and domestic programs that are scheduled to take effect as punishment for the failure of last year’s deficit “supercommittee” to produce a deficit-cutting agreement last year.

Last summer’s debt and budget agreement imposed almost $1 trillion in cuts to agency budgets over the coming decade and required automatic cuts — dubbed a sequester in Washington-speak — of another $1 trillion or so over the coming decade.

The CBO study came as Capitol Hill is hopelessly gridlocked over spending and taxes in advance of the fall elections. The White House and top Democrats like Senate Majority Leader Harry Reid of Nevada say they will refuse to act on the expiring tax cuts and automatic spending cuts unless Republicans show greater flexibility on raising taxes.

“We’re open to a balanced alternative plan for deficit reduction,” Reid told reporters. “But if we can’t do that, a deal’s a deal.”

Republicans are pressing to deal with the problem now. But they’re not showing any more flexibility on tax increases.

“You can call this a fiscal cliff. You can call it Taxmageddon as others have done,” said Sen. Orrin Hatch, R-Utah. “Whatever you call it, it will be a disaster for the middle class. And it will be a disaster for the small businesses that will be the engine of our economic recovery.”

The results of the elections will have a lot to do with the ultimate solution, but several top lawmakers predict the current Congress will punt the issue into 2013 for the newly-elected Congress and whoever occupies the White House to deal with.

CBO is the respected nonpartisan agency of Congress that produces economic analysis and estimates of the cost of legislation.

“I’d prefer the dome remain a monument to our nation’s greatness and not become a symbol for short-sighted austerity,” said Rep. Norm Dicks, D-Wash.

Congress’ approval rating rose to 17 percent in a Gallup poll last month, up from a record low 10 percent approval rating in February.

An Appropriations subcommittee is scheduled to approve the measure Friday before lawmakers exit Washington for a week-long vacation.

In two earlier rounds of appropriations bills for 2011 and 2012, Republicans imposed a 10.5 percent budget cut on the House. Their office budgets — officially called the “members’ representational allowance,” have been cut by a total of 13 percent from the record $660 million approved by a Democratic-controlled Congress for 2010.

“The nation’s budget challenges are far from over, and Congress must continue to lead by example and hold the reins on spending wherever possible, including in our own Capitol complex,” said Appropriations Committee Chairman Harold Rogers, R-Ky. “At the same time, we must maintain the efficacy of the people’s House, and ensure the safety and security of the thousands of people who work in and visit our historic buildings every day. This bill balances both of these needs.”

In March, the House passed a budget plan that would force non-defense cuts of $27 billion below levels agreed to in the budget and debt pact forged by President Barack Obama and House Speaker John Boehner, R-Ohio. Since then, Rogers has revealed plans that generally shield some Cabinet departments — like Justice and Homeland Security — from the cuts, while the departments of Labor, Health and Human Services, Education and Housing and Urban Development will bear a much larger share.

In implementing the GOP budget, authored by Rep. Paul Ryan, R-Wis., Republicans earlier this month passed legislation cutting food stamps, pension benefits for federal workers, health care and social services programs like Meals on Wheels for the elderly.

“For the most part … this bill has been protected from Ryan budget austerity,” Dicks said in a statement.

.

There was universal agreement. The deficit is bad and Washington really, really needs to fix it. Fast.

What was lacking was any agreement on how to do it, and certainly no expectation that the warring tribes in Washington will do anything meaningful to tackle trillion-dollar deficits before the fall elections.

The summit is hosted by Pete Peterson, who has staked $1 billion of his Wall Street fortune on a foundation dedicated to educating the public on the perils of the deficit. Peterson’s events tend to attract many of the same people time after time, including a number of people who are full-time, professional deficit hawks like Maya MacGuineas of the Committee for a Responsible Federal Budget and Bob Bixby of the Concord Coalition.

“Summits like these … bring together people who just get it,” said Boehner. “Of course, while I’m happy to be here and I’m sure we all enjoy each other’s company, we can also agree that we’ve talked this problem to death. It’s about time we roll up our sleeves and get to work.”

Each year, the summit features warnings that it’s best to take on the deficit immediately, so that future solutions don’t have to be as draconian. And there’s handwringing every time about the chronic inability of the warring political parties to drop their talking points and take politically painful steps to tackle the nation’s $15 trillion-plus national debt.

Since last year’s summit, there have been three or four failed attempts at tackling the deficit: talks convened by Vice President Joe Biden; an attempt at a “Grand Bargain” between President Barack Obama and Boehner; the failure of a subsequent deficit “supercommittee” last fall; and the inability of the Senate’s bipartisan “Gang of Six” last fall to gain much traction.

“I think we’re in the post-denial phase of talking about the deficit, both Democrats and Republicans,” opined The Wall Street Journal’s David Wessel.

“What follows denial?” quipped Treasury Secretary Tim Geithner. “Anger?”

The crowd was smaller this year — lots of space at tables for a lunch of pan-seared chicken breast on a mirepoix of spring vegetables — and there was a lot of resignation among participants that not much of anything might get done about trillion dollar-plus deficits before the elections in November.

Boehner made the top headline at this year’s summit by declaring that when it comes time for Congress to raise the nation’s borrowing cap he will again insist on spending cuts and budget reforms exceeding the amount of the debt increase to offset it. He also promised a vote on renewing trillions of dollars in tax cuts passed during the Bush administration, prompting a predictable response from top House Democrat Nancy Pelosi of California.

“Republicans are once again choosing millionaires over the middle class,” Pelosi said in a statement.

That kind of partisanship earns poor reviews from the Peterson conference crowd, where several people lamented the recent primary loss of Indiana Republican Sen. Dick Lugar to a tea party-backed candidate, State Treasurer Richard Mourdock, who has vowed to come to Washington to fight, not compromise.

“We can’t be in a position where one of the negotiating partners says, ‘That’s non-negotiable. Not only will we not raise taxes, we want the Bush tax cuts and we want more tax cuts,’” Clinton told interviewer Tom Brokaw of NBC.

Brokaw, for his part, called out the powerful AARP lobby for senior citizens for being “kind of in your face” to politicians for running an ad reminding them that “we are 50 million seniors who earned our benefits, and you will be hearing from us today and on Election Day.” That’s the kind of stuff that makes deficit hawks furious.

And there was lots of talk about a “fiscal cliff” that’s coming up at the end of the year with the expiration of Bush-era tax cuts and a looming round of automatic spending cuts — called a “sequester” in the budget argot that everybody at the session seemed to take for granted. That led moderators Judy Woodruff of the PBS’ “NewsHour” and ABC’s George Stephanopoulos to ask panelists like House Budget Committee Chairman Paul Ryan, R-Wis., and former Sen. Alan Simpson, R-Wyo., whether there might be some kind of big-time bipartisan budget deal in a post-election “lame duck” session.

Nope. The idea of compromise between politicians who just lost an election and those that just won an election didn’t get a lot of traction among the panelists.

Ryan, who’s hoping Election Day will bring GOP reinforcements beyond the party’s beachhead in the House, suggested instead that there would be a short-term patch to buy time for the new Congress and either a re-elected Obama or Republican President Mitt Romney to work out some sort of agreement.

The summit was opened with an appearance by Geithner, who predicted that the ultimate solution would look a lot like the Obama’s deficit commission, co-chaired by Simpson. The commission got lots of praise from members of the deficit industrial complex like Peterson for recommendations like raising taxes and boosting the Medicare retirement age but was mostly shunned as too radioactive by Obama and the Democratic and GOP leadership on Capitol Hill.

The Simpson proposal, in retrospect, looks like a good deal for Obama, since it included $2 trillion in new tax revenues over a decade and shielded the poor from many of its cuts.

Then came Boehner’s speech, which promised “broad-based tax reform that lowers rates for individuals and businesses while closing deductions, credits and special carve-outs” but failed to offer up any tax increases along the way.

There was universal agreement. The deficit is bad and Washington really, really needs to fix it. Fast.

What was lacking was any agreement on how to do it, and certainly no expectation that the warring tribes in Washington will do anything meaningful to tackle trillion-dollar deficits before the fall elections.

The summit is hosted by Pete Peterson, who has staked $1 billion of his Wall Street fortune on a foundation dedicated to educating the public on the perils of the deficit. Peterson’s events tend to attract many of the same people time after time, including a number of people who are full-time, professional deficit hawks like Maya MacGuineas of the Committee for a Responsible Federal Budget and Bob Bixby of the Concord Coalition.

“Summits like these … bring together people who just get it,” said Boehner. “Of course, while I’m happy to be here and I’m sure we all enjoy each other’s company, we can also agree that we’ve talked this problem to death. It’s about time we roll up our sleeves and get to work.”

Each year, the summit features warnings that it’s best to take on the deficit immediately, so that future solutions don’t have to be as draconian. And there’s handwringing every time about the chronic inability of the warring political parties to drop their talking points and take politically painful steps to tackle the nation’s $15 trillion-plus national debt.

Since last year’s summit, there have been three or four failed attempts at tackling the deficit: talks convened by Vice President Joe Biden; an attempt at a “Grand Bargain” between President Barack Obama and Boehner; the failure of a subsequent deficit “supercommittee” last fall; and the inability of the Senate’s bipartisan “Gang of Six” last fall to gain much traction.

“I think we’re in the post-denial phase of talking about the deficit, both Democrats and Republicans,” opined The Wall Street Journal’s David Wessel.

“What follows denial?” quipped Treasury Secretary Tim Geithner. “Anger?”

The crowd was smaller this year — lots of space at tables for a lunch of pan-seared chicken breast on a mirepoix of spring vegetables — and there was a lot of resignation among participants that not much of anything might get done about trillion dollar-plus deficits before the elections in November.

Boehner made the top headline at this year’s summit by declaring that when it comes time for Congress to raise the nation’s borrowing cap he will again insist on spending cuts and budget reforms exceeding the amount of the debt increase to offset it. He also promised a vote on renewing trillions of dollars in tax cuts passed during the Bush administration, prompting a predictable response from top House Democrat Nancy Pelosi of California.

“Republicans are once again choosing millionaires over the middle class,” Pelosi said in a statement.

That kind of partisanship earns poor reviews from the Peterson conference crowd, where several people lamented the recent primary loss of Indiana Republican Sen. Dick Lugar to a tea party-backed candidate, State Treasurer Richard Mourdock, who has vowed to come to Washington to fight, not compromise.

“We can’t be in a position where one of the negotiating partners says, ‘That’s non-negotiable. Not only will we not raise taxes, we want the Bush tax cuts and we want more tax cuts,’” Clinton told interviewer Tom Brokaw of NBC.

Brokaw, for his part, called out the powerful AARP lobby for senior citizens for being “kind of in your face” to politicians for running an ad reminding them that “we are 50 million seniors who earned our benefits, and you will be hearing from us today and on Election Day.” That’s the kind of stuff that makes deficit hawks furious.

And there was lots of talk about a “fiscal cliff” that’s coming up at the end of the year with the expiration of Bush-era tax cuts and a looming round of automatic spending cuts — called a “sequester” in the budget argot that everybody at the session seemed to take for granted. That led moderators Judy Woodruff of the PBS’ “NewsHour” and ABC’s George Stephanopoulos to ask panelists like House Budget Committee Chairman Paul Ryan, R-Wis., and former Sen. Alan Simpson, R-Wyo., whether there might be some kind of big-time bipartisan budget deal in a post-election “lame duck” session.

Nope. The idea of compromise between politicians who just lost an election and those that just won an election didn’t get a lot of traction among the panelists.

Ryan, who’s hoping Election Day will bring GOP reinforcements beyond the party’s beachhead in the House, suggested instead that there would be a short-term patch to buy time for the new Congress and either a re-elected Obama or Republican President Mitt Romney to work out.

The summit was opened with an appearance by Geithner, who predicted that the ultimate solution would look a lot like the Obama’s deficit commission, co-chaired by Simpson. The commission got lots of praise from members of the deficit industrial complex like Peterson for recommendations like raising taxes and boosting the Medicare retirement age, but was mostly shunned as too radioactive by Obama and the Democratic and GOP leadership on Capitol Hill.

The Simpson proposal, in retrospect, looks like a good deal for Obama, since it included $2 trillion in new tax revenues over a decade and shielded the poor from many of its cuts.

Then came Boehner’s speech, which promised “broad-based tax reform that lowers rates for individuals and businesses while closing deductions, credits and special carve-outs” but failed to offer up any tax increases along the way.