Middle Class will be hurting from the US Fiscal Cliff
US: Fiscal cliff will hurt middle class
December 28, 2012.
Sat Dec 29, 2012 6:28AM GMT
US President Barack Obama has warned that the so-called fiscal cliff of tax hikes and spending cuts will hurt middle-class families if the Senate leaders fail to agree on a deal to avert the impending crisis.
“We’re now at the point where in just four days, every American’s tax rates are scheduled to go up by law. Every American’s paycheck will get considerably smaller…It would be bad for middle-class families and it would be bad for businesses that depend on family spending,” Obama told the reporters after a meeting with congressional leaders.
Earlier in the day, the president had a meeting with Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, Republican House Speaker John Boehner, and House Minority Leader Nancy Pelosi in an attempt to break the deadlock over the fiscal cliff.
The fiscal cliff refers to a combination of tax increases and spending cuts that are set to come into force on January 1, unless Republicans and Democrats can come up with an alternative budget plan. Economists warn that such a shock could send the US economy back into recession.
Describing the meeting as “constructive,” Obama added that he was “optimistic that an agreement can be achieved.”
Meanwhile, he warned that if a deal was not agreed upon, he would ask for a vote on a scaled-back version of his fallback plan.
“If an agreement isn’t reached in time between Senator Reid and Senator McConnell, then I will urge Senator Reid to bring to the floor a basic package for an up-or-down vote.”
Based on Obama’s basic proposal, taxes will not be raised on incomes less than USD 250,000 a year and unemployment insurance will be extended for two million people.
Cutting short his Hawaiian vacation, Obama returned to Washington on Thursday for a final effort to cut a budget deal by New Year’s Day.
Talks between Obama and congressional leaders collapsed on December 20 when Republicans abandoned Boehner’s backup plan, which called for raising taxes on those making more than USD one million a year.