US Congressional Budget Office says tax increases, spending cuts scheduled for January could lead to recession

+The Hill reports that the non-partisan Congressional Budget Office says that unless lawmakers act to prevent scheduled tax increases and spending cuts at the end of the year, a recession will likely result in early 2013.

Early next year income taxes are set to go up when the Bush era tax rates expire. Automatic spending cuts triggered by last August’s debt ceiling deal to the tune of $109 billion are set to hit. Meanwhile, payments to physicians under Medicare will be slashed.

CBO projects that these and other elements of the so-called “fiscal cliff” will cause the economy to contract as demand dries up.

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