By Staci DaSilva
sdasilva@kcautv.com
When the calendars turn to 2013, a deadline strikes. It's called the "fiscal cliff." If Congress can't agree on a deal to reduce the deficit, your taxes will go up and the programs you rely on, will lose funding.
We're not talking just a few bucks. If the economy falls off the so-called "fiscal cliff," the average American household will see a $3,700 tax hike and federal programs will lose over $600 billion dollars in funding.
"It hurts programs both near and dear to the Republicans heart like defense spending and programs near and dear to the Democrats heart like Medicaid payments, Social Security, unemployment insurance," said Asst. Professor of Business Marilyn Eastman of Briar Cliff University.
The deadline was set last year as an agreement that by January 1st, 2013, Congress will reduce the deficit, no matter what.
But that would mean politicians in Washington would have to agree on something, is that even possible?
Rebecca Conway of Sioux City said, "That'd be good for a change since we don't seem to have been able to do that in the past. But I think President Obama, with his reelection, has a mandate from the American people as to what they're in favor of."
And one of the President's mandates is a tax increase on the wealthiest Americans who make over $250,000 a year.
A group that has benefited from tax cuts since the Bush years.
President Obama said, "A modest tax increase on the wealthy is not going to break their backs. They'll still be wealthy."
Congressional Republicans say they're willing to compromise for a deal but they will not support a tax increase.
But in order to move forward, they are going to have to come to some sort of agreement.
"I honestly think that there is going to be some sort of budget deal. I think the consequences are so severe on both sides. We cannot have Congress basically sabotage our economy by not coming to an agreement," said Eastman.
Small businesses owners be aware too. If a deal isn't made, taxes on businesses will increase as well.
We got 7 weeks now to see what happens.
