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 BusinessWASHINGTON — The government is underestimating the threat of a chemical attack on America’s... Full Story
- Most Popular
- Most Emailed
- TODAY'S WEATHER MINUTE: Rutland Herald content editor Rich Alcott shares local weather information and easily digestible news tidbits: Teddy Roosevelt makes Americans believe the poor, peace-loving, misunderstood piranha is a vicious, dangerous animal.
- RICHARD'S POOR ALMANACK: Teamsters leader Jimmy Hoffa disappears on this day in 1975, on this day in 2003, the last Volkswagen Type I, the Beetle, rolls off the assembly line in Mexico, Ambrose Bierce on the classifications of homicide.
- TODAY'S WEATHER MINUTE: Seals have figured out fish they like to eat gather in schools around turbines in offshore wind farms. But the environment is not without hazards, maintenance vessels and noise pollution.
- TOMORROW'S HEADLINES TODAY: Vermont Yankee announces final day of nuclear power generation in Vermont, storm brings floods back to Chester, Castleton town manager to resign office, chronic offender sentenced to 25 years for sexual assault.
- TODAY'S WEATHER MINUTE: Rutland Herald content editor Rich Alcott shares local weather information and easily digestible news tidbits: Archaeologists find a leather shoe in a cave in Armenia that predates the Pyramids by more than a thousand years.
- RICHARD'S POOR ALMANACK: On this day in 1932, President Hoover orders the Army to evict bonus marchers from Anacostia Flats; author Malcolm Lowry born this day, as is Jackie Kennedy and Mike Bloomfield; Stephen Crane on consuming one's own heart.