Tuesday, November 13, 2012--5:40p.m.
MADISON--One week after the election, the lame duck congress returns to Washington, DC, tasked with keeping the country from going over the so-called "fiscal cliff". But the problem remains: the two sides don't agree on how to tackle the issue.
Besides sounding ominous, what exactly is the fiscal cliff?
"Congress along with the president passed this law that December 31st of this year, automatically spending will be cut five percent across the board on everything to try to balance the budget," said Richard Shaten, an economics instructor at Madison College.
He says additionally, the Bush tax cuts and payroll tax cuts will expire.
"We cut government spending, raise taxes and the cliff is that unemployment is likely to go up and we're facing a renewed recessional cycle," said Shaten.
So how does any of this affect you? Shaten says a family of two adults, with two kids, earning a combined $90,000 a year, could see their taxes go up by around $2,000 a year, if the Bush tax cuts and payroll tax benefits expire.
What all of this could mean for the future, if congress doesn't work it out by December 31st, Shaten says:"I wouldn't say there's a reason to panic immediately." He says most of the analyses he's seen, predict close to zero growth in 2013 (if we go over the cliff). "By this time next year unemployment could be pushing nine percent again," he said.