Wed Jun 22, 2011 7:28pm EDT
* Democrats call for new stimulus * Biden group pushes ahead in deficit-reduction talks
* CBO says benefits will swamp economy in long term (Adds Baucus, other details)
By
Richard Cowan and
Andy Sullivan
WASHINGTON, June 22 (Reuters) - Democratic leaders called on Wednesday for new spending and tax cuts to boost the sluggish U.S. economy, setting up a fresh hurdle for bipartisan efforts to head off a government debt default this summer.
At the same time, a new report warned that the country could face a European-style debt crisis unless Washington cuts spending or raises taxes.