Senate Democrats and Republicans have finally agreed on something. The New York Times reported that an "ambitious three-step plan" to side-step the economy's looming "Fiscal Cliff" on Jan. 1 has garnered bipartisan support according to lawmakers and aids.
In case you hadn't heard, the Fiscal Cliff is a perfect storm of events including automatic tax increases and deep spending cuts that could result in tax increases of 20 percent for 90 percent of U.S. families and send the country spiraling into a tailspin.
The plan, as reported by the Times, "is to hold a postelection session of Congress to reach agreement on a comprehensive deficit reduction deal rather than a short-term solution."
That deal would involve approving a framework for overhauling the tax code, which along with reductions in programs like Medicare and Social Security, as well as other cuts in federal spending, would help the country reach an agreed-upon targeted deficit reduction.
And if that doesn't work, Plan B includes "changes to Social Security, broad cuts in federal programs and actions that would lower tax rates overall but eliminate or pare enough deductions to yield as much as $2 trillion in additional revenue," reported the Times.
Finally, Congress would vote to put off the automatic spending cuts and tax increases scheduled for Jan. 1, accompanied by a down payment.
The Fiscal Cliff, a term coined by U.S. Federal Reserve Chairman Ben Bernanke, is the combined effect of the expiration of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 and spending reductions ("sequestrations") under the Budget Control Act of 2011.
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