The Real Truth About the Fiscal Cliff
What exactly is going to happen when the fiscal cliff hits on January 1, 2013?
The “fiscal cliff” is a package of expiring tax cuts and federal spending cuts passed by congress during the last budget battle. $600 billion in combined tax increases and spending cuts will hit suddenly in January if congress does not come up with an alternate plan. The combination of cuts and tax increases would slash the budget deficit in half, but potentially pull the economy into another recession, according to many economists.
Republicans and Democrats are currently racing against the clock to come up with a deal to avoid this scenario. Despite the few days remaining, they have not been able to agree on the details of an alternative to the fiscal cliff scenario.
But are their plans so different? The difference in savings may not be as significant as you think.