The nonpartisan Congressional Budget Office (CBO) on Wednesday warned the economy will enter a recession next year if the country goes over the so-called fiscal cliff.
In its most dire warning yet about the fiscal cliff, the CBO said the
economy would contract by 0.5 percent in calendar year 2013 if the
George W. Bush-era tax rates expire and automatic spending cuts are
Unemployment also would rise from 8.2 percent in 2012 to 9.1 percent next year, the office estimates.
“The stakes of fiscal policy are very high right now,” CBO
Director Doug Elmendorf said. He urged Congress to act in September to
avoid the fiscal cliff. (Continues)