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."