January 1st is fast approaching, and there has yet to be an agreement over how to resolve the issue of the ‘fiscal cliff’. The fiscal cliff refers to a number of laws to take effect beginning on New Year’s that would result in tax increases, spending cuts, and a reduction in
the US budget deficit. The deficit is expected to be reduced by about 50% in 2013. The Congressional Budget Office (CBO) estimates that this reduction will most likely lead to a recession in early 2013. So what’s the latest?

It has been released that President Barack Obama and House Speaker John Boehner had a “short” phone call on November 6th, their first call in a week, and this should remain promising to us according to ABC Reporter John Carl. Carl stated, “What might be the most significant sign of progress: neither side talked about what was said on the call; an indication they may be serious about negotiating in private…”

Recently, some Republicans are beginning to admit that tax rates on the wealthy will have to go up, but the President has put his foot down and insisted that the U.S. debt limit must rise as well. The government reaches its limit of how much money it can borrow in February, and Republicans want spending cuts, so if they cannot get them in exchange for the tax increases, they will fight over the debt ceiling.

It has become apparent that President Obama will not not negotiate on that either. For us, only time will tell if we will be able to take a detour around this fiscal cliff or if we will remain full speed ahead over the edge.