The Fiscal Cliff

            The Fiscal Cliff is a term coined by Ben Bernanke the chairman of the Federal Reserve referring to the end of the Bush-era tax cuts that are set to expire next year, after which expensive spending cuts are to go into effect.The Bush-era tax cuts were put into effect in 2001 and 2003 when the Republicans had control over the House. At the time they had hoped that they would be a permanent way to re-write the tax code. But that was not the case, they ended up having to put an expiration date on them of 2010. The question of what would happen when 2010 rolled around became much more debated after the Republicans lost control of the house in 2006. After that Republicans and Democrats fought over what would happen, Republicans wanting to make them Permanent and Democrats wanted to end them for upper-income households.

             In 2010 Obama made a deal to expend the cuts two more years to help support the still fragile economy we were dealing with. When 2012 rolled around the tax cuts became a big platform in the Presidential Campaign. Obama wanting to end them for households that made over $250,000 a year, Romney argued that it would still harm the economy and small businesses. Immediately after Obama's re-election the focus in Washington was on the Fiscal Cliff.

             When talks concerning what to do about this Cliff began Obama promised to veto any deals that did not include higher taxes on the wealthy. John Boehner, the Speaker of the House and Republican, firmly stands behind the Republican parties believe that the taxes should  not be released, but is open to conversion on Tax Reforms. It's safe to say that Republicans and Democrats are at a stand still on the subject for two reasons. One its the end of the year and many members of Congress are being taken out and sworn into office so there is little people who are not re-elected can do, also Republicans and Democrats simply cannot reach a compromise. The Fiscal Cliff was put into effect to force politicians to make a decision on the Tax crisis, essentially putting a gun to their heads in order to come to a decision  But now time is short and they are still no where close to a decision.