The U.S. would be plunged into a significant recession in the first half of next year if Congress fails to avert nearly $500 billion in tax hikes and spending cuts set to hit in January, congressional budget analysts said Wednesday.
The massive round of New Year's belt-tightening — known as the "fiscal cliff" or Taxmageddon — would disrupt recent economic progress, push the unemployment rate back up to 9.1 percent by the end of 2013 and produce economic conditions "that will probably be considered a recession," the nonpartisan Congressional Budget Office said.
The outlook is considerably darker than the forecast the agency released in January, which predicted the fiscal cliff would trigger a mild recession in the first half of 2013 followed by a quick recovery.