What is the Fiscal Cliff and how does it affect me?
On Jan. 1, 2013 when the terms of the Budget Control Act of 2011 take effect, the United States will face what has been referred to as the “fiscal cliff.” In general, this refers to widespread tax increases and spending cuts that will occur if the tax cuts put in place by former President George W. Bush expire as scheduled.
Congress is working to negotiate a deal to avoid the fiscal cliff but faces significant challenges in reach a compromise. If a deal cannot be reached, the economy could be significantly impacted: the U.S. could face another recession, unemployment rates could skyrocket and many individuals and businesses could suffer the effects. However, reaching the fiscal cliff would cut the federal deficit and some sources say negative effects would be gradual and could be addressed after Jan. 1.
This Talon Benefits Legislative Brief provides an overview of the fiscal cliff and how it could affect you and your organization.