Beware, Fiscal Cliff Ahead

Economists say at least $1 trillion is needed to sustain a recovery that is faltering

- BY Cristina Lindblad

A crisis can stretch for weeks, months, or even years, but its arc can be shaped by a few crucial moments when political leaders choose a course of action. For a U.S. economy still reeling from the devastation of the novel coronavirus, one such moment is approaching.

Economists are warning that the nation is in danger of careening offa fiscal cliff unless Congress approves a rescue package to succeed the $2 trillion Coronavirus Aid, Relief, and Economic Security Act. Key elements of that are set to expire this month just as a resurgence of the virus in states that rushed to reopen is making the nascent recovery look decidedly vulnerable. The Trump administration is calling on Republicans and Democrats to get legislation passed before the start of the August recess. “If Congress fumbles this, it’ll be a pretty big setback for the economy,” says Michael Feroli, chief U.S. economist at JPMorgan Chase & Co.