Excerpt
JUDY WOODRUFF (Newshour): With the election over, there's new talk in Washington about finally coming to grips with taxes, spending and the deficit. The mammoth problem has been hanging over Congress and the president for many months, and now time is running out.
In just five days, lawmakers troop back to the Capitol for a final, lame-duck session. And they are under mounting pressure to avoid going off the much-talked-about fiscal cliff. Come January 1, the Bush era tax cuts will expire, as will a 2 percent payroll tax cut that was passed in December of 2010.
At the same time, large automatic spending cuts would begin to bite, 10 percent less for defense in 2013, and an 8 percent cut in domestic programs.
The result, according to Federal Reserve Chairman Ben Bernanke, could be disastrous. He said this in July, citing the Congressional Budget Office.
BEN BERNANKE, Federal Reserve chairman: The CBO has estimated that if the full range of tax increases and spending cuts were allowed to take effect, a scenario widely referred to as the fiscal cliff, a shallow recession would occur early next year and about 1.4 million fewer jobs would be created in 2013.
JUDY WOODRUFF: Today, in a new estimate, CBO said that extending all tax breaks, other than the payroll tax cut, would boost growth by nearly 1.5 percent next year. And it said raising taxes just for individuals earning more than $200,000 a year wouldn't significantly hurt growth.
A deal on taxes and spending and deficits eluded the so-called congressional super committee a year ago, but now outside groups are pressing for a deal, as in this ad being run by Fix the Debt, an organization founded by former Republican Sen. Alan Simpson and former Clinton Chief of Staff Erskine Bowles.
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