As weary as many Americans grew of campaign commercials last month, they may be getting even more annoyed this month by endless talk of the fiscal cliff, the massive collection of tax increases and spending cuts set to take effect at year’s end.
It’s easy to understand the urge to stick fingers in ears and loudly chant “la-la-la-la.” The budget problems are indeed complicated and the negotiations tedious.
But resolving the mess is extremely important: Without a solution, every person who gets a paycheck or has investments will see his or her taxes rise.
And if the stalemate were to linger deep into the new year, many people could see their jobs disappear. The nonpartisan Congressional Budget Office says that if President Obama and lawmakers fail to reach an agreement, the U.S. unemployment rate later in 2013 could rise to 9 percent, from the current 7.7 percent.
Many economists say that might trigger a new recession some time next year. And that, in turn, could hurt the whole global economy as our trading partners start to feel the contraction.
Of course, both the White House and Congress say they have every intention of reaching some kind of agreement. In fact, the House of Representatives was formally scheduled to go home for the year this week, but Majority Leader Eric Cantor, R-Va., announced that “the House will not adjourn the 112th Congress until a credible solution to the fiscal cliff has been found.”
But what if no deal is struck?
Here is a timeline of the changes that — in the absence of any action by the president and Congress — would start to take effect early in the new year: