WASHINGTON (November 8, 2012)--A new Congressional Budget Office report says the so-called fiscal cliff would send the economy back into recession and cause a spike in the jobless rate to 9.1 percent by next fall.
The CBO analysis says the combination of automatic tax increases and spending cuts would cut the deficit by $503 billion through next September, but says that would cause the economy to shrink by 0.5 percent next year.
The report comes as a newly re-elected President Barack Obama and Congress are seeking ways to avert the problems.
The study estimates that America's gross domestic product would grow by 2.2 percent if the Bush-era tax rates were extended and expand by almost 3 percent if Mr. Obama's payroll tax cut and jobless benefits for the long-term unemployed are extended.
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