As Americans prepare to put 2012 behind them and ring in the new year, one big, dark, looming, uncertainty still remains on the horizon… the fiscal cliff. Earlier today, House Speaker John Boehner’s recommendation for a fallback plan to avoid the cliff was rejected by the White House.
In recent months, there has been more frequent speculation, punditry, and dooming predictions about what could happen if Republicans and Democrats in Washington D.C. are unable to agree on how to avoiding the fiscal cliff before January 1. But what exactly is the fiscal cliff and what would falling off of it mean for average Americans?
Simply put, the fiscal cliff is a series of tax increases and government spending cuts set to automatically take place in January, in the event that no other fiscal policy is enacted before that time. If this happens, according to the non-partisan Tax Policy Institute, tax rates would increase by an average of 4 percent or $3,346 (depending on the tax bracket); at least tens of thousands of American jobs would be lost; and the average paycheck would be lowered by about $50 per month due to the expiration of Social Security and Medicare tax reductions.
Jobs that are primarily paid for by federal revenue would be most at risk for elimination, including 7,240 Transportation Security Administration (TSA) security officer jobs, 2,200 air-traffic controller jobs, and 6,800 Border Patrol jobs among others, according to Representative Norm Dicks (D-Wash), the ranking Democrat on the House Appropriations Committee. Estimations of how the Aerospace industry would be impacted by defense spending cuts vary, but as many as 500,000 jobs in that sector could be cut, many of which are based in Florida.
Are Congress and the White House overlooking how the fiscal cliff will impact the average citizen? How would the U.S. economy be able to persevere if it does fall off of the fiscal cliff?
Doyle McManus, Washington Columnist, covering national and international politics, Los Angeles Times
Matt DeBord, KPCC Reporter; writes the DeBord Report KPCC.org