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What's next for approaching 'fiscal cliff'?

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  • Description

    Is Washington staring into the abyss?

  • Duration 2:36
  • Date

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Walk up will we walk up rather to the precipice and stop war jump over and into an economic black hole.

Take a deep breath because.

Here we go again chief national correspondent Jim Angle has details.

The fiscal whoever crafted to be so -- -- -- officials wouldn't do any and everything to avoid it.

Which obviously did not work we go.

-- we could actually be in a recession next year there would actually decrease the size of the economy but the fiscal cliff is.

440 billion dollars in taxes and 200 billion dollars of spending cuts so.

Going over the full fiscal cliff is a -- recession -- no question about it.

Not the way mr.

Obama wants to begin his second term the fiscal -- and it's simultaneous convergence of tax increases and spending cuts won't wreak Havoc with the economy.

Spending cuts for instance would take one point two trillion over ten years 100 billion in the first year.

These are big cuts ten to 14% in programs a quarter of the way through their fiscal year.

That that's bad policy and dangerous the biggest stumbling block however is tax increases everyone wants to extend the bush tax cuts for those making less than 250000.

A year.

The president however wants to raise taxes on those making more and and other taxes to boot.

Some analysts argue that would crush small businesses which create two thirds of all jobs -- Tax increases that President Obama has fought for.

What actually increase taxes on small businesses by about fifty billion dollars a year.

It going forward.

-- and 2010 when the economy was growing a 2.3 percent.

President Obama extended all the -- cuts -- the economy was too weak to digest a tax increase.

Now the economy's growing and only 2% but mr.

Obama is forging ahead and senator Reid argues he got a mandate to do so.

The president.

Campaigned.

Around the country saying.

We we know what the -- are with its fiscal problem but we just need some revenue.

That was free issue.

The speaker of the house is increase revenues -- fine but depending on where they come from -- for the purposes of forging a bipartisan agreement that begins to solve the problem.

We're willing to accept -- revenue under the right conditions.

Meeting new revenue from growth and reform not tax increases he points to the bipartisan 1986 Reagan reforms which eliminated tax deductions in order to increase revenues and lower tax rates.

The same approach by the way given President Obama by Bowles Simpson -- this will be a busy time.

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