Legislation passed this week to avert the “fiscal cliff” could still leave in place deficits averaging more than $900 billion a year over the coming decade if Congress fails to follow its tax increases up with further spending cuts or tax hikes, the nonpartisan scorekeeper for Congress said Friday.
The Congressional Budget Office also says the measure should reduce the risk of recession this year by not slamming the economy with a huge tax increase.
The CBO issued a study in August predicting a $10 trillion deficit over the next 10 years if Congress simply followed existing tax and spending policies instead of following the laws that threatened a combination of automatic tax increases and spending cuts.
This weeks’ cliff law would cut $700 billion to $800 billion from CBO’s 10-year, $10 trillion deficit estimate. But it also leaves in place across-the-board spending cuts that would cut more than $1 trillion from the budget over that time.