With a little over three days before the United States goes over the fiscal cliff, top lawmakers are heading to the White House for 11th-hour talks with the President.
If they are unable to reach an economic deal, a series of automatically imposed spending cuts and tax raises will go into effect. They include major defense budget cuts, reductions in unemployment benefits and the end of the so-called Bush tax cuts. For a summary of the major fiscal cliff effects, see this CBS News roundup.
The Tax Policy Center says should lawmakers fail to reach a deal before the cliff deadlines, 88 percent of American taxpayers will be affected by tax increases. Already, industry is feeling effects, as our sister publication Industry Market Trends showed.
In an interview with the Manufacturers Alliance for Productivity and Innovation (MAPI), Daniel J. Meckstroth, the group’s chief economist, noted that “manufacturing production is set to increase 2 percent next year, but economic models indicate that going off the fiscal cliff will take 3 percentage points off production growth, resulting in a net decline of 1 percent.”
Experts expect that going off the cliff will also plunge the country back into recession and raise the unemployment rate as high as 9 percent.
Lawmakers have already met several times to in attempts to work out a deal, but to date none of the talks have proved fruitful. Those attending today’s meeting have expressed doubtful outlooks.
Senate Minority Leader Mitch McConnell (R, Ky.) remained adamant that negotiating a deal would be tough. “I told the president I would be happy to look at whatever he proposes, but the truth is we’re coming up against a hard deadline here, and as I said, this is a conversation we should have had months ago,” McConnell told ABC News.