CBO Warns U.S. Headed for Major Recession
The Congressional Budget Office has renewed warnings the U.S. economy will fall into recession if scheduled spending cuts and tax hikes take effect in January. According to the CBO, the so-called "fiscal cliff" of expiring tax cuts coupled with the need to cut $1.2 trillion in spending under last year’s debt deal will force the downturn. The CBO has previously warned the U.S. economy faces a contraction of 1.3 percent, but it is now revised that prediction to a higher number of 2.9 percent, a dip it says is "similar in magnitude to the recession of the early 1990s."