WASHINGTON—The U.S. economy will slide into recession in 2013 if Congress fails to act to maintain current tax rates and avert deep cuts to federal spending, the Congressional Budget Office said Wednesday in likely the last nonpartisan economic forecast before the November elections.
In its twice annual budgetary outlook, the CBO said U.S. gross domestic product will decline by 0.5% in 2013, while the unemployment rate will hover around 9% next year. Under current law, the budget deficit would improve substantially next year as a result of the scheduled increase in tax rates and reductions in federal spending, shrinking to $641 billion, or 4% of gross domestic product.
