CBO: Fiscal Cliff Will Bring 9.1% Unemployment

We need less cliff, more 'gradual slope,' suggests forecast
By John Johnson,  Newser Staff
Posted Nov 8, 2012 7:06 PM CST
CBO: Fiscal Cliff Will Bring 9.1% Unemployment
In this Oct. 25 photo, a sign attracts job-seekers during a job fair at the Marriott Hotel in Colonie, N.Y.   (AP Photo/Mike Groll)

It's not so much a surprising conclusion as a reminder of what's at stake: The Congressional Budget Office warned today that a failure to head off the fiscal cliff at year's end will probably lead to a new recession next year along with a jump in the unemployment rate to 9.1%, reports Politico. The nonpartisan panel said the abrupt combination of tax hikes and spending cuts also would slow economic growth by .5% over the year, reports the Wall Street Journal. The report comes as House Republicans and the White House were suggesting they were ready to talk about a deal.

And now comes the tricky part, as the Christian Science Monitor explains: While the CBO warned that doing nothing and plunging over the cliff is bad in the short term, it said those tax increases and spending cuts would help in the long run by reducing the deficit and the national debt. "The ideal way forward, suggested in the CBO report and in other independent reviews, would be to change the cliff into a gradual slope," writes the Monitor's Mark Trumbull, "one that avoids recession in the near-term but still leads down a path of deficit reduction." (More fiscal cliff stories.)

Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.