Home / News / CBO Predicts 9.1% Unemployment In Event of Full Fiscal Cliff

CBO Predicts 9.1% Unemployment In Event of Full Fiscal Cliff

The Congressional Budget Office has released its projections of both short-term and long-term effects of the U.S. going off the fiscal cliff in January, Fierce Government reports.

Along with Bush-era tax cuts expiring and spending cuts under sequestration, Geoff Whiting writes the fiscal cliff also includes the end of the payroll tax holiday, middle-class tax cuts from the stimulus, unemployment insurance for the long-term unemployed, cuts to Medicare providers’ fees and a Medicare surtax.

CBO estimates all those events occurring would reduce the nation’s deficit by $500 billion annually, but raise unemployment to 9.1 percent and reduce the gross domestic product by 2 percent.

If none of those events occur, CBO estimates the deficit for fiscal year 2013 would increase by $500 million and then $700 billion in fiscal 2014.

CBO suggested that the Congress take a downward slope approach to avoid the cliff by balancing reduced entitlements, spending cuts and raising tax revenues.

Check Also

Report: Army’s CDID Eyes Robotic Technologies for Precision Strikes Against Enemies

The U.S. Army's capabilities development and integration directorate has teamed up with the National Advanced Mobility Consortium to develop autonomous system and robotic technologies intended for precision strike operations, Military.com reported Monday.

Leave a Reply

Your email address will not be published. Required fields are marked *