The driver of a maserati, which then crashed into a taxi. The taxi driver and his occupant were both killed. It caused a major piem pooilup on the las vegas trip. There were three other people inju injured. Nevada has legalized online interstate gamble iing. It pushed through a bill with joint committees in both houses of the state legislature in less than four hours. Governor sandoval signed the measure today thursday rather. And new jerseys governor Chris Christie says he may sign a similar measure for his state next week. Gay priests, blackmail and corruption at the vatican. Italian newspaper publishes a bombshell story days before catholic leaders choose a new pope. Well have the latest coming up in 30 minutes for now. Thanks for starting your morning with us. Ill see you at the top of the hour. Your bottom line starts right now. Thanks. See you at the top of the hour. Were not in a recession. For many of you, it sure might feel like one. Good morning, everyone. Im christine romans. For a moment there it felt like things were turning around, stock market near alltime highs, Housing Market recovering and the economy adding jobs every month. Now relief may have given way to a little bit of worry. Heres why. Its starting to feel like a recession again, especially if youre living paycheck to paycheck, gas prices up nearly 50 cents in the past month. The fastest runup, youre bringing homeless money, thanks to the expiration of the tax cut. Youre getting about 60 bucks less every month. Rents are rising, up 12 quarters in a row now. Unemployment is still too high. If you were counting on an early tax refupd you have had to wait. Because of the fiscal cliff fiasco, the irs did not start issuing refund checks until january 30th. A stretched consumer, a consumer who has no choice but to cut back. Big companies you work for say this is already happening. This week, walmart, the proxy for the American Consumer says february sales were slow. Why . It blamed gas prices, the end of the payroll tax holiday and those delayed tax refunds. Thats what we know. Washington to the rescue . Of course not. On friday comes austerity, services will be curtailed, jobs will be lost. Europes experience could prove a valuable warning to washington. 17nation eurozone is in a de deepening recession. In greece, thousands took to the streets to protest austerity measures where unemployment is in a shocking, shocking 17 . International Monetary Fund and economic crisis expert, ken, should we be taking very seriously the sequester and what that will do in the near term to the u. S. Economy . The sequester is not just a cut back, but a very crude cut back, sort of just chop one finger off at every hand instead of letting somebody go. I think it was designed that way because the idea was this will force us to do something. But now they havent. Im starting to hear people in washington say, look, this is going to force some efficiencies in these agencies. Theyve had budgets that have been getting bigger and bigger for years, stimulus thrown into all different kind of Safety Net Fund funds. Maybe this is just tough medicine. It might force efficiencies into some agencies, though they really werent planning for it, so theyre having to do it pretty hectically. Some agencies you dont want to cut. Across the board cuts are a very crude way to run policy. Do you want to cut your research and development, medical care, projects where you promised to pay and may end up losing a lot of money . The problem is its so crude. They said, okay, this wont happen. We all know we wont do this. We all agree there is no way to run a country. Yes. No way to run a checkbook. Terri savidge writes a column. The National Retail federation says nearly threequarters of those polled are cutting back because of tax changes this year. This is a twospeed recovery, right . Recovery for people with savings and a job and this other recovery for people who arent on solid footing in the job front or in savings. Is the paycheck to paycheck crowd already in recession territory . I think its wrong to label it. A lot of Government Spending isnt going to be cut, social security, medicare. Theyre exempt. When you take a look at business, i heard on cnn the chairman of Marriott International saying were lowering our expectations, business wont travel as much. Every family will be impacted. Every family has already been impacted to some extent. As you pointed out, when businesses cut back, that impacts their suppliers, it impacts their workers and there is no doubt that the combination now, look, lets put the numbers in perspective. We took 110 billion in tax increases. This is 85 billion in tax cuts. Right now were focused on the Immediate Impact. U. S. Economy is strong. Its been trying to grow for two years, despite what comes out of washington. And the real issue beyond this Immediate Impact is what happens to america so we dont get to be like greece, so that the kind of austerity that greece had to have, which really destroys the fabric of society, doesnt happen here . Are we better dealing with it now . Should everybody, the government and consumers at all levels take a bit of a cutback now to avoid that kind of draconian cuts theyve had in europe . Thats what i hear a lot, ken. The reason you have to do maybe not a sequester but the reason you have to have budget cutting now, even in an economy thats not on solid footing is because this is preventing us from being like greece. The lesson is not look at europe and being afraid of austerity in the u. S. The lesson is you better do austerity smart now in the u. S. Its like the chicken and the egg. Austerity is smart but this isnt. Policy not in a sensible way. You want to spend more things on infrastructure, education. There are things you want to cut back. The problem here is that its just theres nobody home making the policies. Thats whats so frustrating. Well continue this conversation. Forced Government Spending cuts are set to take effect this friday. Be prepared. Ill show you who specifically will be hit hardest. All stations come over to mission a for a final go. This is for real this time. Step seven point two one two. Verify and lock. Command is locked. Five seconds. Three, two, one. Standing by for capture. The most Innovative Software on the planet. Dragon is captured. Is connecting todays leading companies to places beyond it. Siemens. Answers. Is moving backward. [ engine turns over, tires squeal ] and youll find advanced Safety Technology like an available headsup display on the 2013 lexus gs. Theres no going back. Bjorn earns unlimited rewards for his Small Business. Take these bags to room 12 please. [ garth ] bjorns Small Business earns double miles on every purchase every day. Produce delivery. 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Get an autoinsurance quote. Usaa. We know what it means to serve. An economy poised to soar is now under attack by its own government. Set to take effect next sunday. Forced spending cuts created during the 2011 debt ceiling debacle. It was a worst Case Scenario that was designed to be so bad lawmakers would be forced to make a budget deal to prevent it. But now it looks like the most vulnerable in our society will be paying the price for washingtons inaction. 70,000 children from lower income families will lose their spots in head start programs, putting more than 14,000 teaching and staff jobs at risk. Cuts to Mental Health programs mean almost 400,000 seriously mentally ill people would go untreated. And more than 100,000 people would be thrown out of emergency housing and back on to the streets. 3. 8 million americans on unemployment would see their benefits fall by 9. 4 . Thats about 400 less theyll get through the end of the year. Everyone, though, will feel this one way or another. While washington, washington plays a blame game. The bottom line is very simple. The republicans have proposed devastating cuts. Washington democrats have gotten used to republicans bailing them out of their own lack of responsibility. Senior writer at cnn money. Theyre going like this, each pointing at the other. And were stuck here in the middle, trying to figure out who is going to get hurt first and hardest. Some of these tough decisions are not going to get made. There are some who may argue, jean, that the scenario is not that bad and its necessary. These cuts are going to hurt the most vulnerable. How do these cuts translate to hurting the economy nor generally, jean . The Congressional Budget Office estimates for this calendar year were probably going to lose six Percentage Points of Economic Growth. Its not going to put us in recession. On top of the tax increases, were looking at 1. 5 points of growth being curbed. Its Economic Growth we cant really afford to just forfeit for a set of cuts that most people say are pretty bad pol y policy. It helps deficits but doesnt really help us with the debt problem. Thats where were at. And, you know, its been the most predictable crisis, you kn know. Of the last few years. I want to bring in ken rogoff and teri savage back into the conversation. You say the impact of these cuts are being overdrama tied. Explain. What were doing is creating a drama to cover up for the fact that congress has totally abdicated responsibility. Its like the mother shouting im going to give you the count of three to come down, one, two, 2 1 2. Come down here. This is really important. Im start over. One, two. This is going to go on all spring. Its not just the sequester. Then the president brings his budget to congress. We havent had a real budget in four years. Then the republicans have to bring their budget at the end of march. If we dont have a budget well have the threat of shutdown. Then theyll pass a continuing resolution. Then everybody goes on spring break ins with an. By the time they come back, the 7th of april, were facing tax day where we will continue to pay and they will maybe or maybe not get paid if they cant come together with some kind of a deal. So, this is a drama that i think the American Public is getting tired of it. I am certainly tired of it. I love your analogy with the children. Ken rogoff, i have to say, comparing members of congress to children who arent listening is a very, very good analogy. It is serious. I think that some do overplay the drama or play up what is legitimate drama because, you know, they want to shine a light on this. Were talking about labs that wont be funded, research that wont get funded. Wont happen day one maybe but as the days wear on, this will have a real effect on a lot of things that we take for granted that are working in the economy. To put a positive spin on it, and its hard. Its a vaccination. If we just keep spending and spending, eventually the Market Forces it on us. And its much more unpleasant. Its sort of an artificial crisis to prevent a real one. But at the end of the day, they dont agree on where to go. And how much are we going to cut spending. Theres no pressure from the market. Theres no pressure at all right now from the market. Interest rates are so low, its incredible. Ill tell you one thing. Thats not necessarily a sign that nothing will ever happen. There are many cases where things roll along for a long time and the market doesnt see it. The thing is that the horizon is not a year. Its more like five years, ten years, 15 years. Its so hard theyre not even going to be in office necessarily. Some of the people in congress are in office forever, i suppose. Thats whats hard about it. The real problem, they dont agree on how to manage it. They create this artificial crisis. If you want to know when a lot of whats happening in all of this, you have to read jeanne sahardi at cnn. Com. Youre looking at what Government Agencies are saying, what the budget experts are saying. There are people in washington trying to figure out how to spend money differently starting in one week. Right. This morning, he pointed out we thought this would happen january 2nd. Agencies were preparing for that. Then it got postponed for two months. Now it may happen, theres still a chance in the next week that congress does an 11 00 pm deal that says well cancel the sequester, postpone it for a couple of months. Thats yet more planning. Or the cuts go into effect march 1 but dont really happen until april but somewhere between march 1 and march 27 where they have to pass more funding for the rest of the fiscal year, they come up with a deal to replace the sequester. Agencies are spending time, money and people planning for something that everybody says is bad policy. And theyve had to do it in three different versions. It defies logic. It defies logic. You have a show. Today on cnns it defies logic thank you so much, ren rogoff, Jeanne Sahadi and terri savage. This building is getting a lot of attention. Whats going on inside. Its a serious threat to our safety and security in america under attack every single day. And you end up choosing google, you get an xbox. Ill bet you the xbox, you bet me your son. Well lets look up what you need. Okay, i would do the left. Yeah . What . i am a daddy bing wins it bing won. Bing did win. People prefer bing over google for the webs top searches. Dont believe it . Go to bingiton. Com and see what youre missing. I honestly loved smoking, and i honestly didnt think i would ever quit. [ male announcer ] along with support, chantix is proven to help people quit smoking. It reduces the urge to smoke. It put me at ease that you could smoke on the first week. 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[ male announcer ] ask your doctor if chantix is right for you. Just about every single day in this country, the u. S. Is under attack. Repeated attack. Cyber attack. Its Government Agencies. Its companies, financial institutions, universities. And this Cyber Espionage is working. This week a Cyber Security firm pinpointed a specific building in shanghai, china where they say hundreds of hacking operations took place to target Computer Networks at large companies, Government Agencies here in the u. S. And other countries around the world. And the report says the operations from that building, backed by the Chinese Military. When a cnn news crew drove by to investigate, Security Officials gave chase. Keep driving. Drive away. Drive away. Drive away. Drive away later confiscating some of the tape in their possession. Officials in china strongly denying any of these claims. I will be very clear, the chinese always deny claims of hacking, Cyber Espionage, any kinds of military espionage. Whats more, they accuse the u. S. Of hacking into hundreds of Computer Networks in china. Experts here in the u. S. Have a tough time putting a number on how much damages are caused by these as much as 100 billion or more. Intellectual property one of the most serious losses. Industrial secrets that may have taken decades to assemble here are stolen within days by advanced Hacking Networks said to be emanating from china. Barbara starr a cnn pentagon correspondent, Chris Johnson is Senior Adviser at the center for Strategic International studies. He was a former senior china analyst at the cia. Chris, let me start with you. The ceo of namdia said that they had had enough. We felt that tolerance in the private sector, that its just shrinking. People are sick and frustrated with how much i. P. Weve lost to chinese hackers. We felt it was just a natural timing. Chris, sounds like u. S. Corporations have had enough. Yes, i think thats definitely true. I mean, whats telling about the report that has just come out is the pervasiveness of this espio