We are facing the largest tax increase in history—Taxmageddon, scheduled to take effect January 1—and what experts are calling a “fiscal cliff” of sharp and unforgiving budget changes that will send the country spiraling downward. Congress and the President have the power to prevent this, and when the August congressional recess is over, that is exactly what they should do.
In its new report, the CBO said that if Congress does not act, it’s not economic growth we should be worried about, because the economy will actually shrink next year. It will shrink by 0.5 percent, and the unemployment rate will spike to 9.1 percent.
Heritage’s Patrick Louis Knudsen points out several other sobering projections from the CBO report:
In the middle of this fiscal disaster, the government has no budget. That’s right—Congress has abdicated its responsibility for producing a budget for the country. The Senate failed to produce a budget for the third year in a row. Congressional leaders keep passing temporary stopgap bills to continue funding government operations, but this is unacceptable. They have to take this seriously. Perhaps the CBO’s dire warnings will give them the sense of urgency they are missing.
- For the fourth year in a row, the federal government in 2012 will run a budget deficit exceeding $1 trillion.
- The deficit is already $49 billion higher than CBO’s January estimate.
- Debt held by the public this year will reach $11.3 trillion by October, roughly three-fourths of the entire economy.
I wouldn't bet five cents on the Democrats passing a budget this year. Never happen, not just before an election when their bloated Stimulus spending and failed crony green jobs programs have failed miserably and left the country on the edge of a fiscal abyss.
The only real quibble I have with the CBO report is the assertion we would "return" to a recession when we've never really left the original Obama repression of 2009.