CBO Says US Economy Headed Over a “Cliff”

May 23, 2012 in Uncategorized


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 Headlines like the following? 

 CBO: Recession in 2013 unless

 Congress acts on fiscal issues

 By Erik Wasson – 05/22/12 08:17 PM ET

“This is the first time CBO has forecast a recession resulting from the  fiscal cliff. “

The nonpartisan Congressional Budget Office (CBO) said Tuesday that unless lawmakers act to prevent scheduled tax increases and spending cuts at the end of the year, a recession will likely result in early 2013.

Early next year income taxes are set to go up when the Bush-era tax rates expire. Automatic spending cuts totaling roughly $109 billion triggered by last August’s debt-ceiling deal are set to hit. Meanwhile, payments to physicians under Medicare will be slashed.

CBO projects that these and other elements of the so-called “fiscal cliff” will cause the economy to contract as demand dries up.