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 — Average long-term U.S. Full StoryATLANTIC CITY, N.J. Full Story
- Most Popular
- Most Emailed
- RICHARD'S POOR ALMANACK: On this day 1739, 'Richard Palmer' identified in prison at York Castle as the notorious outlaw DICK TURPIN; IN 1836, Battle of the Alamo begins near San Antonio de Bexar, Texas; 1896, the Tootsie Roll invented by LEO HIRSCHFELD.
- RICHARD'S POOR ALMANACK: On this day in 1472, Orkney, Shetland islands put up as collateral by Norway to Scotland in lieu of dowry for MARGARET OF DENMARK on her marriage with JAMES III, king of Scotland; 1962, JOHN GLENN first American to orbit Earth.
- TOMORROW'S HEADLINES TODAY: City mayoral candidates debate campaign issues; Hartford, Conn., woman still missing; Neal Goswami reports attempts to legislate suicide; local woman loses 100 pounds through TOPS program.
- RICHARD'S POOR ALMANACK: On this day in 1878, JOHN TUNSTALL murdered near Lincoln, New Mexico, by the outlaw JESSE EVANS; in 1930, ELM FARM OLLIE first cow to fly in aircraft, first to be milked airborne; 1955, nuke test WASP; '79, snow in Sahara.
- TOMORROW'S HEADLINES TODAY: Rutland Herald News Editor Alan J. Keays and staff writer Gordon Dritschilo discuss stories planned for the February 18, 2015, edition of the newspaper: Winter budgets maxed, legal marijuana, Springfield bank job, USPS slowdown
- RICHARD'S POOR ALMANACK: On this day in 1249 AD, ANDRE of LONGJUMEAU is dispatched by LOUIS IX of France to meet the KHAGAN, ruler of the Mongol Empire; in 1804, during 1st Barbary War, STEPHEN DECATUR scuttles the pirate-held USS Philadelphia in Tripoli.