The International Monetary Fund (IMF) revised its World Economic Outlook on Tuesday, which found that our already sluggish economic growth has further slowed. Carlo Cottaralli, director of IMF's fiscal affairs department, said in an interview that the automatic spending cuts and tax hikes set to take effect in January, which has been referred to as the "fiscal cliff" by some, would be "very negative and very bad for the U.S. economy." Cottaralli went on to suggest that if America fails to adopt a plan to reduce the deficit and avert the fiscal cliff, we will face another recession.
The nonpartisan Congressional Budget Office (CBO) sounded similar notes in its most recent economic forecast. The CBO report, like the IMF report, stated that pending spending cuts and tax increases set to take effect on January 1, 2013 could send the U.S. economy spiraling into another recession. The CBO warned that this would send the unemployment rate soaring above 9 percent by the end of 2013. Federal debt held by the public would reach 73 percent of gross domestic product (GDP) by the end of this fiscal year, its highest level since 1950. The individual income tax alone would rise by $1.1 trillion in 2013.
The Bureau of Labor Statistics released its latest jobs report on Friday, and buried beneath the headlines of the lower unemployment rate was a more concerning statistic: there are 23.2 million underemployed Americans who cannot find any or enough work. To make matters worse, the number of able Americans seeking employment has plunged to near a 32-year low. We shouldn't celebrate lower unemployment numbers since people have stopped looking for work, and we shouldn't continue to settle for the status quo when it clearly isn't working.
Before adjourning for August work period, House Republicans passed H.R. 8, the Job Protection and Recession Prevention Act. This legislation would prevent another recession by stopping the tax hike and replacing the automatic spending cuts to defense with savings that target waste, fraud and abuse in our entitlement programs that are on autopilot.
During the worst recovery in 70 years, the president is once again failing to lead by allowing a small business tax increase the will destroy an additional 700,000 jobs. House Republicans have also passed nearly 40 jobs bills that will get Americans back to work, but the Democrat-led Senate refuses to consider them. America deserves better, and you can rest assured I will continue to fight for pro-growth, job-creating policies.