GOLDEN VALLEY, Minn. -- With the countdown on to the fiscal cliff deadline, Hamline University professor and political analyst David Schultz says lawmakers do have options.
The first one is to do nothing to avoid the tax increases and automatic spending cuts congress itself mandated when it worked out a deal to increase the federal debt ceiling in 2011.
Shultz says if congress takes that route, the average middle class family is looking at a $2200/yr increase in federal taxes when the Bush-era tax cuts expire. That's on top of an expected two-percent per paycheck cut due to the payroll tax holiday expiring. The other downside? Many economists believe that route would send the nation back into recession.
Congress could kick the can down the road by extending tax cuts for a short time and let the next congress deal with it. The new congress will be sworn in January 3rd.
Lawmakers could extend tax cuts for the middle class, but House Speaker John Boehner has already been spurned by his own party for a deal that would increase taxes on millionaires only.
Congress could enact the Simpson-Bowles Commission recommendations, which was a bi-partisan effort to avoid the very trap congress created when it made the debt ceiling deal. Those recommendations that dealt with long term debt could be a framework, Schultz says, for a new deal.
Schultz also says congress could do none of the above.
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