How Far Over The 'fiscal Cliff' Could They Go?
By CONNIE CASS
WASHINGTON (AP) â¿¿ The dealmakers who warn that a year-end plunge off the "fiscal cliff" would be disastrous don't seem to be rushing to stop it. Why aren't they panicking?
For one thing, the Dec. 31 deadline is more flexible than it sounds. Like all skilled procrastinators, from kids putting off homework to taxpayers who file late, Washington negotiators know they can finagle more time if they need it.
That doesn't mean delay would be cost-free. Stock markets might tank if 2013 dawns without a deal. But Americans could be temporarily spared many of the other ill effects if Congress and President Barack Obama blow past their deadline.The Obama administration would have power to delay some of the tax increases and spending cuts that would officially take effect as January begins. Then, if an agreement is reached early in the year, it could be applied retroactively to wipe them out. Some lawmakers even argue that briefly going over the cliff is the best way to force a compromise. The Obama administration on Wednesday indicated it would take the plunge if necessary to ensure that the wealthy end up paying higher tax rates. Pushing the deadline too far is a risky strategy, however. The Congressional Budget Office predicts that the fiscal cliff policies, if left unchecked, would spark a recession later in 2013 and send the unemployment rate above 9 percent by fall. How long could negotiators balk and bicker before putting the U.S. economy in jeopardy? The calendar becomes less and less forgiving as the weeks pass. A procrastinator's guide to pushing the deadline: ___ DECEMBER Democrats led by Obama and Republicans led by House Speaker John Boehner say it's critical to reach a deal this month. Yet both sides appear dug in over taxes. And their two plans are far apart on how much to cut spending while the economy is still recovering from the last recession.
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