Fiscal cliff would spark recession
A report says the so-called fiscal cliff would send the economy back into recession and cause a spike in the unemployment rate to above 9 % by next fall. The analysis by the Congressional Budget Office says the combination of automatic tax increases and spending cuts would reduce the deficit by half a trillion dollars but would cause the economy to shrink. The report also says the nation's gross domestic product would grow if the Bush-era tax cuts were extended and if President Obama's payroll tax cut and jobless benefits for the long-term unemployed are extended. The President and leaders in Congress have said they want compromises on taxes and budget cuts to avert the drastic measures from taking effect automatically in January.