The Wall Street Journal doesn't sugarcoat it:

U.S. companies are scaling back investment plans at the fastest pace since the recession, signaling more trouble for the economic recovery.

Half of the nation's 40 biggest publicly traded corporate spenders have announced plans to curtail capital expenditures this year or next, according to a review by The Wall Street Journal of securities filings and conference calls.

Nationwide, business investment in equipment and software-a measure of economic vitality in the corporate sector-stalled in the third quarter for the first time since early 2009. Corporate investment in new buildings has declined.

Corporate executives say they are slowing or delaying big projects to protect profits amid easing demand and rising uncertainty. Uncertainty around the U.S. elections and federal budget policies also appear among the factors driving the investment pullback since midyear. It is unclear whether Washington will avert the so-called fiscal cliff, tax increases and spending cuts scheduled to begin Jan. 2.

Companies fear that failure to resolve the fiscal cliff will tip the economy back into recession by sapping consumer spending, damaging investor confidence and eating into corporate profits. A deal to avert the cliff could include tax-code changes, such as revamping tax breaks or rates, that hurt specific sectors.

President Barack Obama called a number of business executives over the weekend, including Warren Buffett, Apple Inc. AAPL +3.08% Chief Executive Tim Cook and J.P. Morgan Chase's JPM +2.10% James Dimon, to promote his solution to the looming budget crisis. All sides in Washington, in a departure from a year of deep divisions, have pledged to work together and compromise to avoid going over the cliff.

"The whole world is looking for stability and clarity from the United States," said David Seaton, chief executive of Fluor Corp., FLR +1.25% a large engineering and construction firm. If uncertainty isn't removed, he said, "people will sit on their war chests of cash and return it to shareholders. You'll have a retarded growth trajectory.

At the same time, exports are slowing or falling to such critical markets as China and the euro zone as the global economy downshifts, creating another drag on firms' expansion plans.

Conversely, a deal on the fiscal cliff before the first of the year could give a boost to the economy, as pent up demand is released and economic activity increases substantially.

Unfortunately, there are other factors in determining growth and the downturn in Europe and China, as well as a general slowing in global output could result in the US slipping into a recession anyway.

If I were a betting man, I would put the chances of a deal before the end of the year on the fiscal cliff at just one in three. It is by no means certain that whatever the principals agree to - Obama, Boehner, Pelosi, Reid and McConnell - that the rank and file in either party will support.

That is why we are likely to enter the new year poised for a recession.