In its annual report, the nonpartisan Congressional Budget Office (CBO) predicts that if a stalemate over tax and spending cuts continues between Democrats and Republicans, the U.S. could be left with a $1.1 trillion deficit. If the projection is correct, this would be the fourth straight year that the government's shortfall exceeds $1 trillion. And with the looming expiration on Jan. 1, 2013 of decade-old tax cuts and the planned implementation of sweeping spending cuts — America will fall off this "fiscal cliff" automatically without congressional action — the CBO warns that we could see "economic conditions in 2013 that will probably be considered a recession." President Obama has asked for an extension of tax cuts for individuals making less than $200,000 a year, and families making less than $250,000 a year, but Republicans want all Bush-era tax cuts to be extended. The two sides have also not been able to come to agreement on automatic spending cuts that were set in motion "by the failure of lawmakers last year to reach a bipartisan debt-reduction agreement."
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