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The fiscal cliff was of high discussion during the election as both republicans and democrats have different alternatives as to handle the economic downturn. If the proposed plan for 2013 goes through, the impact on the economy could be dramatic, totaling to about $7 trillion.
The fiscal cliff policies that effect students the most includes:
The end of payroll tax holiday: In 2010, President Obama cut payroll taxes by 2%. This means workers were bringing home more of their checks. If the plan goes in to effect, households will be paying at least $1000 more in payroll taxes a year. So, that check you bring home every week is going to start to look a little bit smaller.
The start of budget cuts meant to alleviate the debt ceiling: The Budget Control Act will include major spending cuts in the areas of defense and education. That means even less financial aid for the average student.All in all, taxes will increase for most Americans while government spending will be cut. The White House and Congress are hard at work coming up with solutions that will lessen the impact of the fiscal cliff. Options range from allowing the new policies to take effect to finding out a balanced tax-budget cut program. If the policies take effect, it will cut the deficit by billions, but could send the fragile government into another recession. Time is running out for the Congress to make a decision as the new year is approaching.
Shanika
@carpeNIKA | shanika.simmons90@gmail.com
