The Next Big Storm: A Feared Fiscal Cliff [AUDIO]
A new type of storm is on the horizon. The so-called, "fiscal cliff" that threatens to plunge the nation into a new recession.
The two sides in Washington have been sharply divided on the issue of extending tax cuts and Federal spending cuts before the election. Without the tax cuts and the spending reductions, most Americans will take a big hit, starting in January.
Rider University Economist Maury Randall says, "I think it's going to be very damaging politically, as well as economically."
There is a lot of hope Democrats and Republicans will come to an agreement in the coming weeks. Montclair University Political Scientist Brigid Harrison believes that with election partisanship behind them she thinks it will mean that you will see much more negotiating going on.
A report issued Thursday by the Congressional Budget Office said the fiscal cliff would send the economy back into recession and cause a spike in the jobless rate to 9.1 percent by next fall. The analysis says the combination of automatic tax increases and spending cuts would cut the deficit by $503 billion through next September. But that would cause the economy to shrink by 0.5 percent next year.
Fears of the "fiscal cliff" have driven stocks down this week.