WASHINGTON, Sept. 24 (Xinhua) -- Uncertainty arising from bipartisan fight over the federal budget and the debt ceiling is weighing heavily on the anemic economic recovery in the United States, a renowned U.S. economist said Tuesday.
"The U.S. economy remains frustratingly far from full employment. While there are many reasons for this, political brinkmanship around the federal budget and Treasury debt ceiling has been a significant contributing factor," said Mark Zandi, chief economist at Moody's Analytics, during a hearing at Senate Budget Committee Tuesday.
"Harsh political vitriol, threats of shutting down the government, and the possibility of not fulfilling the government's financial obligations have weighed heavily on the collective psyche," he said.
Washington faces two looming deadlines: one for funding the government in the new fiscal year beginning Oct. 1; the other for the debt limit, which the U.S. Treasury Department has said will need to be raised by mid-October.
The Republican-led House of Representatives on Friday passed a stopgap spending bill, which was championed by the conservatives, to fund the government through Dec. 15 at current funding levels while prohibiting funding to implement the Affordable Care Act, commonly known as Obamacare.
The House bill is moving to the Democrats-controlled Senate, where Democrats would for certain restore the Obamacare funding before sending it back to the House for passage by Sept. 30, the last day of the current fiscal year.
With about only one week remaining before a potential government shutdown, Republican and Democratic lawmakers are still locked in a stalemate over the fiscal issue.
"U.S. economy's prospects are improving, but this will continue only if policymakers can resolve their differences in a timely way, " Zandi warned.
Without solving the fiscal deadlock, businesses are more reluctant to invest and hire, entrepreneurs are less likely to attempt startups, financial institutions are more circumspect about lending, and households are more cautious about spending, he cautioned.