The impending and dreaded so-called fiscal cliff is a deadline on a group of bills and legislative acts that currently govern almost all facets of the federal government, with many of the current laws, tax codes and more set to change or expire simultaneously. This is a deadline that if not avoided by timely and effective congressional action, will trigger severe and nearly immediate funding cuts—sequestration—in federal programs and services along with tax increases estimated in the $650 billion range, according to the Congressional Budget Office. The major portion (approximately $500 billion) would be caused by increased taxes when the Bush and other tax cuts expire, combined with Congress’ refusal to patch the Alternative Minimum Tax (AMT). --- Many in the nation’s economic community feel these actions, or Congress’ lack of action, by midnight Dec. 31, 2012., could possibly trigger another deep recession. Economist Wilhelmina Leigh said this impasse is not due to any one thing, nor is it attributable to recent economic shortfalls, but has been brewing for years. Leigh is a senior research associate at the Joint Center for Political and Economic Studies in Washington, D.C. “The U.S. has been on a collision course for the last decade or so, where we’re spending more and taking in less in revenues,” said Leigh. “We haven’t been able to change that pattern of behavior because members of Congress weren’t really willing to, and now all sorts of things have converged—our deficit each year has been adding up over time, so now we have a huge debt.”
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