The U.S. Senate is down to the final hours before the fiscal cliff December 31, 2012 deadline.
Many have warned of the financial repercussions and possible new recession caused by the series of tax increases and spending cuts scheduled to take effect when the New Year begins. The U.S. Congress is fully aware of the potential disaster, but has yet to finalize a deal.
According to an article by CNN, the U.S. Senate is scheduled to reconvene today at 11 a.m. Eastern Time. Senate Majority Leader Harry Reid said he hopes to work out some sort of deal before the ball drops on Times Square, but he readily admits that Senate Republicans and Democrats are still significantly apart.
Some compromises were worked out over the weekend. One was the income threshold for tax increases. President Barack Obama wanted to increase income taxes on incomes $250,000 or greater, but Senate Democrats have agreed to raise the income threshold for tax increases to $450,000. Social Security has also been batted around with both sides playing politics with the nation’s pension program and each accusing the other of doing so for political gain.
If the fiscal cliff becomes reality at midnight tonight, it will increases taxes on most every person in the country and reduce spending in several key areas. According to the Congressional Budget Office, the combined effects could cut economic growth up to 0.5% and push unemployment up between 1 percent and 1.5 percent nationally.
With so many economic measurements headed in negative directions, the fiscal cliff could easily plunge the nation right back into recession. Only a short time remains for Senate Democrats and Republicans to work out their differences and avoid another economic financial meltdown.
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