Remember back in July when a Washington Post headline blared "Democrats threaten to go over ‘fiscal cliff’ if GOP fails to raise taxes?" If not, click the link to see it.
On Wednesday, the CBO issued a dire warning which makes it clear that if Democrats do deliberately throw the U.S. over the "fiscal cliff" as they threatened to do, the economy would go into another recession next year.
Via The Hill:
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 implemented.
Unemployment also would rise from 8.2 percent in 2012 to 9.1 percent next year, the office estimates.
Via the CBO release:
What Policy Changes Are Scheduled to Take Effect in January 2013?
Among the policy changes that are due to occur in January under current law, the following will have the largest impact on the budget and the economy:- A host of significant provisions of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Public Law 111-312) are set to expire, including provisions that extended reductions in tax rates and expansions of tax credits and deductions originally enacted in 2001, 2003, or 2009. (Provisions designed to limit the reach of the alternative minimum tax, or AMT, expired on December 31, 2011.)
- Sharp reductions in Medicare’s payment rates for physicians’ services are scheduled to take effect.
- Automatic enforcement procedures established by the Budget Control Act of 2011 (P.L. 112-25) to restrain discretionary and mandatory spending are set to go into effect.
- Extensions of emergency unemployment benefits and a reduction of 2 percentage points in the payroll tax for Social Security are scheduled to expire.
More at Washington Times, The Daily Caller and commentary over at Hot Air.
Related
Overwhelming Majority Says Lower Taxes, Less Regulations Would Make Them More Likely To Invest
(Headline correction made)
