Zandi Says Failure to Extend Tax Cuts Would Reduce U.S. GDP

Mark Zandi, chief economist at Moody’s Analytics Inc., will tell lawmakers that failure to extend the payroll-tax cut and emergency unemployment benefits would “deliver a significant blow” to the U.S. economy.

Economic growth in the U.S. will be reduced by 0.7 percentage point in 2012 if both programs aren’t extended through year-end, Zandi said in remarks to be delivered to the Joint Economic Committee of Congress today. If the programs are extended, the world’s largest economy will expand by 2.6 percent, he said.