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Fiscal Cliff 2013

Fiscal Cliff 2013

Fiscal Cliff Definition and Explanation

It's tough to browse through a single news site without encountering the so-called fiscal cliff. Investors, politicians and American workers are anticipating the end of 2012, when tax relief measures and deep spending cuts will automatically go into effect. The fiscal cliff -- a name introduced by Federal Reserve Chairman Ben Bernanke -- isn't so much of a cliff as it is the potential fiscal drag that could gradually take effect with the end of the Bush tax cuts, payroll tax cut, Alternative Minimum Tax patches, and spending cuts from last summer's debt ceiling agreement.

The Congressional Budget Office, a nonpartisan group for the U.S. Congress, has projected that the country will fall into a recession if legislators allow all changes to go through. Some investment houses have suggested the United States' gross domestic product could shrink by as much as 4.5% in the event of a full cliff. Market and political analysts have said that a lame-duck Congress may succeed in temporarily pushing back the decision by a few months so that the newly-elected Congress could pass a viable budget plan. Onlookers have worried that negotiations in Washington D.C. could mimic the disastrous debt-ceiling discussions in 2011 that led to Standard & Poor's downgrade of the U.S. credit rating. Early negotiations have ebbed worries of a 2011 repeat as legislators won't need to worry about an election cycle in 2013.

Have questions about the fiscal cliff? Get in touch with TheStreet's political reporter, Joe Deaux, via Twitter

Fiscal Cliff Tweets

Fiscal Cliff Investing Strategies

Fiscal Cliff Opinions

Jim Cramer on the Fiscal Cliff

Fiscal Cliff Humor and Optimism

Will the Fiscal Cliff Affect Me?

Fiscal Cliff News by Joe Deaux

The expiration of the payroll tax cut at the end of 2012 has put a dent on consumer spending.
2/20/13 3:30PM
Gold prices turn negative after early gains Tuesday as the Bank of Japan's governor says he'll step down, opening the door for looser policy.
2/5/13 2:47PM
As the world ages, illegal immigrants are driving U.S. population growth. If denied legal status, they and their children could become an economic drag.
2/1/13 8:40AM
The three constituencies have different reasons. Here's why.
1/23/13 5:05PM
Obama preemptively slams Republicans who may vote against raising the debt ceiling, but here's why some may do it.
1/14/13 3:20PM
Gold prices plummet on Friday after the Fed minutes reveal mixed feelings about the central bank's stimulus programs.
1/4/13 2:22PM
John Boehner may have retained his post as House Speaker, but his leadership style could cost Republicans in 2014 mid-term elections.
1/4/13 6:45AM
The central bank says it will end bond purchases sometime this year.
1/3/13 3:32PM
A survey shows that households earning $450,000 or more are conflicted on tax hikes.
1/3/13 6:50AM
Gold prices jump in the new year after Congress passes a package to avoid the so-called fiscal cliff.
1/2/13 2:21PM

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