The clock is ticking. U.S. House leaders have until Thursday to pass a bill that shields most Americans from fiscal cliff consequences, mostly higher taxes.
It seems like social security tax increases are already a done deal. There's no language in the bill the Senate overwhelmingly approved to stop those cuts from expiring, which they did, last night. So right now, working citizens are taking home two-percentage points less. Unemployment benefits are unchanging for about 2 million Americans. Lawmakers have an idea of whose income tax rates will increase, but they don't have to decide yet where they will spend less money.
"They postponed the so-called sequestration, the big government spending cuts, for two months." -says Rockford College Associate Professor of Economics and Political Science Bob Evans.
Evans says this means less support from the House majority, "Because it's mainly a tax increase bill with little or no spending cuts, the republicans are not very pleased with it."
In the current proposal, individuals making $400,000 or more will pay higher income tax. Capital gains and estate taxes are raised slightly as well. Professor Evans says the House could either vote on the proposal as it is, or representatives can introduce amendments, pass them, and then it's back to the Senate. Problems start up if no deal is reached, since newly-elected members of Congress are sworn-in Thursday.
"If any bill isn't passed, then it has to start all over again with a new Congress, so the deadline now is not January 1st but noon on January 3rd." -says Evans.
Rockford College Economics and Business Professor Fred Rezazadeh says he's never seen anything like what's going on in Washington now during his more than 30-year career.
"We've never discussed raising taxes and reducing spending at the time of recession or very weak economy and high unemployment, we do the opposite actually." -says Rezazadeh.
House representatives went into session on Tuesday at noon.
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