Oct. 11, 2012 at 1:02 PM ET
The U.S. is heading towards fiscal disaster and no one in Washington is doing anything about it, the authors of the Simpson-Bowles reform plan and Goldman Sachs CEO Lloyd Blankfein told CNBC Thursday.
"People are never going to understand how critical this particular time in history is," said Erskine Bowles, the North Carolina businessman and co-chairman of President Obama's National Commission on Fiscal Responsibility and Reform. "We have $7.7 trillion worth of economic events that are going to hit America in the gut in December, and in Washington they're doing nothing about it."
Bowles' co-chair on the commission was former Wyoming Sen. Alan Simpson, who said political culture in Washington is preventing any action to address what is known as the "fiscal cliff."
"They're both in this," Simpson said of the warring Democratic and Republican parties. "They worship the god of re-election."
Wall Street titan Blankfein said resolving the conflict would go a long way toward rejuvenating confidence in the financial markets.
"I think the (presidential) candidates know how serious it is," he said. "I think they're trying to avoid it in part because it is so consequential and serious and the ideas that would be put forward are unattractive to some people."
The trio spoke jointly as the moment of truth for the fiscal cliff approaches.
The term comes from Federal Reserve Chairman Ben Bernanke, who used it to describe the peril of what will happen should the automatic tax increases and massive spending cuts be allowed to take effect on Jan. 1.
Economists peg the damage as high as $720 billion and 4.6 percent of gross domestic product.
There are several components involveded.
At stake are payroll tax cuts, a fix on the Alternative Minimum Tax and unemployment benefits among them.
Across-the board tax cuts enacted during President George W. Bush's term represent, at $180 billion, are the biggest slice of the pie. They are targeted because Democrats consider the cuts skewed towards the rich.
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