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Recession Likely in 2013 If U.S. Congress Doesn’t Act, CBO Says

The U.S. economy will probably tip into recession next year if lawmakers can’t break an impasse over the federal budget, according to a report.

The nonpartisan Congressional Budget Office said today that scheduled tax increases and spending cuts in 2013 would reverse the modest economic recovery. Economic output would shrink next year by 0.5 percent, joblessness would climb to about 9 percent with “economic conditions in 2013 that will probably be considered a recession,” the agency said in a biannual report on the budget and economic outlook.