The so-called fiscal cliff is an economy-rattling combination of expiring Bush- and Obama-era tax cuts and major across-the-board spending cuts to the Pentagon and domestic programs.
The cliff is the punishment for previous failures of a bitterly divided Congress and White House to deal with the government’s spiraling debt or overhaul its unwieldy tax code. The Congressional Budget Office estimates that the austerity program would reduce the deficit by $503 billion through the end of next September — or approaching $700 billion for the entire calendar year. CBO says millions of jobs could be lost.
The fiscal cliff includes:
—The expiration of Bush-era tax cuts on income, investments, married couples and families with children and inheritances. In addition, some 26 million additional face the alternative minimum tax next filing season, which would raise their taxes by an average of $3,700. Cost through September: $330 billion.
—A $55 billion, 9 percent cut in the defense budget next year and another $55 billion in cuts to domestic programs, including a 2 percent cut to Medicare providers.
—The expiration of unemployment benefits for the long-term jobless. Cost: $26 billion.
—A sharp cut in reimbursements for doctors participating in Medicare. Cost: $11 billion.
—The expiration of Obama’s temporary 2 percentage point cut in payroll taxes. Cost: $95 billion.
—A variety of smaller tax cuts for both businesses and individuals collectively known as tax “extenders.” They include a tax credit for research and development and a deduction for sales taxes in states that don’t have an income tax. Cost: about $65 billion.
—A need to increase the government’s borrowing cap (the so-called debt limit) of $16.4 trillion. The government is expected to hit the cap late this year but the Treasury Department has the authority to juggle certain accounts to buy several more weeks of time so that Congress won’t have to act until early next year.
- The Associated PressMORE IN National / World BusinessNEW YORK — The stock market rose for a third straight day Wednesday despite a report from the... Full StoryBUENOS AIRES, Argentina — Argentina will make its next round of scheduled debt payments, the... Full Story
- Most Popular
- Most Emailed
- TOMORROW'S HEADLINES TODAY: Jim Jeffords' legacy, Brandon takes a few questions about proposed budget, beleaguered city playground likely to move, woman awakes to find strange man with knives standing at her bedside.
- TOMORROW'S HEADLINES TODAY: Former U.S. Senator James Jeffords dies Monday in Washington D.C., a local man is beaten and robbed while walking on West Street, Clarendon sets a tax rate and Brandon convenes an informational public meeting about its budget.
- RICHARD'S POOR ALMANACK: On this day in 1915, the New York World publishes scoop: Thom. Edison diverts chemical from war production to help German pharmaceutical company make aspirin; on this day in 1935, Will Rogers, Wiley Post die in Alaska plane crash.
- TOMORROW'S HEADLINES TODAY: State panel briefed on smuggling drugs into prisons; new French-German documentary about Vermont's heroin addiction; solar project at Vets Home falls apart; update dispute between Open Door Mission and treatment center.
- TODAY'S WEATHER MINUTE: Climatologists might not know as much about El Nino as they thought they knew. New studies show 10,000 years ago, El Nino was active, and polar ice sheets were rapidly melting — just like today.
- TOMORROW'S HEADLINES TODAY: State colleges get a budget cut break, vandals spray paint Wallingford basketball court, state's attorney will replace lost deputies, cop lawsuit proceeds, Mendon mini-golf proposal makes headway.