CBO warns of "fiscal cliff" January 1 - KATV - Breaking News, Weather and Razorback Sports

CBO warns of "fiscal cliff" January 1

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WASHINGTON, D.C. (CNN) - The nonpartisan Congressional Budget Office has a dire warning about the so-called fiscal cliff.

It says the cliff would pack several big punches, if we go over it, next year.

The fiscal cliff is a series of spending cuts and tax increases that start taking effect in January. CBO officials say it could send the US economy into another recession. They say if the cliff goes into effect for all of next year, we could see unemployment up to 9.1 percent and a drop in real gross domestic product.

Congress could avert the cliff, but it would require cooperation between them and President Obama.

Some of the issues that could come up, include cuts in defense and non-defense spending, Bush-era tax cuts expiring, and reimbursement cuts for Medicare doctors.