President Obama and Congress are flirting with both a recession and a bigger jump in unemployment next year unless they head off looming tax increases and spending cuts — but doing so could mean a fifth straight year of trillion-dollar deficits, the government’s chief scorekeeper said Wednesday.
The latest update by the Congressional Budget Office shows the time for hard choices that lawmakers have feared for years is now here: Leaders must choose between economic pain and budget-tightening now, or continuing to bolster the U.S. economy with the risk of a bigger fiscal collapse later.
Either way, there will be pain. Even if the government continues pumping cash into the economy, the unemployment rate will average 8 percent next year. But the pain is worse if the money stops: Joblessness would peak above 9 percent and remain above 8 percent at least through the end of 2014.
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