The Congressional Budget Office said Wednesday that the so-called fiscal cliff, the simultaneous tax hikes and government spending cuts that take effect Jan. 1, 2013, will send the U.S. economy into recession next year.

"Such fiscal tightening will lead to economic conditions in 2013 that will probably be considered a recession, with real GDP declining by 0.5 percent between the fourth quarter of 2012 and the fourth quarter of 2013 and the unemployment rate rising to about 9 percent in the second half of calendar year 2013," the CBO said in its twice annual budgetary outlook.

Unless Congress acts, something that appears less-than certain, on Jan. 1, 2013, estate taxes, federal income-tax rates and rates on dividends and capital gains and payroll taxes will rise. At the same time federal spending will fall by $110 billion as a result of a deficit-reduction deal made in 2011.

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