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US economy heading for a freefall?

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    CBO warns about ending Bush-era tax cuts

  • Duration 2:55
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Good evening I'm Bret -- the nonpartisan Congressional Budget Office has issued a dire warning to the federal government.

If some tax breaks are allowed to expire and certain scheduled spending cuts become reality.

Another recession is a very real possibility.

Even as Americans are still feeling the pinch from the last -- Chief national correspondent Jim Angle has the numbers and wanting me.

The Congressional Budget Office is predicting the economy will sure right if several large tax cuts are allowed to expire at the end of the year.

The CBO said that along with -- -- spending cuts would hammer the economy.

Bottom line here is they're predicting that we will have another recession in the first half of 2013.

The CBO predicts economic growth would -- by one point 3% in the first six months of next year and -- only growth path for present for the entire year.

Far less than even a slow -- -- President Obama took office.

Money is being sucked out of the private sector by increased taxes the government is taking that money.

Out of the private sector which men cannot raise the capital to invested in job creation.

All the bush tax cuts as well as the payroll tax cut and other breaks aimed at stimulating the economy expire automatically at the end of the year.

Which some called tax you again.

Because it would increase taxes by almost 500 billion dollars in the first year alone Republicans have been urging the president to start now to prevent where's the president's plan.

To stop the largest tax increase from.

In American history from our current -- -- -- the first.

Automatic spending cuts are also employs -- -- sequester agreed to last year Republicans say the across the board cuts to defense and domestic spending part too harsh.

And should be replaced with other cuts Democrats say there's another way tax increases.

Move on revenues we could had to be a long time ago the president said that.

We got together -- White House last Wednesday.

Today house democratic leader Nancy Pelosi sent a letter to speaker Boehner calling on Republicans to schedule a vote immediately to extend tax cuts for middle income Americans she seemed to move on and on increases for the wealthy however dropping the insistence on tax increases for those over 250000.

And income saying quote.

Democrats believe the tax cuts for those earning over a million dollars a year should expire.

And -- we should use the resulting revenues to pay down the deficit.

Republicans however -- tax increases on higher incomes will her job creators.

The last thing you want to do this to impose more taxes on the very people.

That you need to create the jobs.

And while the two parties joust over the -- -- one analyst says the economy will continue to suffer.

What's even worse than the reality is the uncertainty of not knowing what -- -- really going to happen.

It turns out that uncertainty affects business decisions more than the reality forward.

And that in itself is a big -- job creation and economic growth one Democrat by the way sisters are growing consensus in his party to draw the line -- a million dollars for tax increases -- -- more than on this from the panel Jim.

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