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Really, How Real Is That Fiscal Cliff?

6:35 PM, Dec 17, 2012   |    comments
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Buffalo, N.Y. - Will the sky really fall on January 1st if there's no deal in Washington?

Much like what happened two summers ago, with the last Washington crisis, that one over the debt ceiling, Republicans in congress and the President are once again playing a game of chicken.

And with this being Washington, where nothing gets done until it absolutely, positively has to, the 18 days between now and the New Year is still an eternity.

Former Congressman Tom Reynolds, who's now a lobbyist in Washington and has been speaking with both Democrats and Republicans, says Santa won't be bringing taxpayers any deals this Christmas.

Tom Reynolds: "It looks to me that this is going to carry over post Christmas into that week in between Christmas and New Year's bringing lawmakers back. I think what I sense from the average lawmaker is they want to figure out a solution."

The 'Tax Lady' Esther Gulyas, has been working her calculator overtime trying to figure out the impact a trip over the cliff would have.

Esther Gulyas: "Each side's got to budge otherwise you're going to have a divorce and we're all going to pay the alimony."

Scott Brown: "Do you think somebody will blink here?"

Esther Gulyas: "I do, I do. But I think what they're going to blink with is with a patch until the federal government needs more money and it will become another game of chicken in the spring."

And that's something important to remember here- yes the Bush tax cuts expire on New Year's Day, but they can be extended. They were originally set to expire this past January, but the President and congress simply extended them.

But what about a worst case scenario where there's no deal and no extensions?

We had Gulyas estimate what it would cost, at a minimum, for a family with two kids and a household income of $75,000 a year.

* Their federal taxes would go up by about $1,600 a year.

* Their Child Tax Credit of $1,000 per child would be cut in half, costing them another thousand dollars.

Their Social Security tax cut of the past two years would expire, costing them an extra $1,500.

So just those three areas add up to over of over $4,000. 

And with virtually every American affected if there is no deal, many experts feel at the very worst, that January 1st deadline will be extended if there's no deal by then.

Tom Reynolds: "They can't make it go away, they're going to have to come to a solution, but they could postpone the deadline to give themselves more time."

 

 

 

 

 

 

 

 

 

 

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