In the United States, the fiscal cliff was the sharp decline in the federal budget deficit that could have occurred beginning in early January 2013 due to increased taxes and reduced spending as required by previously enacted laws. The deficitthe amount by which government spending exceeds its revenuewas projected to be reduced by roughly half in 2013. The Congressional Budget Office (CBO) had estimated that the fiscal cliff would have likely led to a mild recession with higher unemployment in 2013, followed by strengthening in the labor market with increased economic growth. Instead, the American Taxpayer Relief Act of 2012 (ATRA) largely eliminated the revenue side of the fiscal cliff by implementing a higher deficit and a smaller increase compared to the previously enacted laws. Adjustments to spending were expected to be resolved in early 2013.