News / USA

Christmas Cheer Giving Way to Fiscal Cliff Fears

The U.S. Capitol Christmas Tree is pictured against a backdrop of the U.S. Capitol Building in Washington, December 4, 2012.
The U.S. Capitol Christmas Tree is pictured against a backdrop of the U.S. Capitol Building in Washington, December 4, 2012.
Most of the Christmas holiday celebrations are over. So, for many Americans, thoughts are turning from joy and good cheer to gloom and doom as President Barack Obama and lawmakers approach the looming fiscal cliff - a combination of tax hikes and federal spending cuts that could push the country back into recession.  

Economic fears have been on the mind of holiday shoppers, like Holly Hill in Atlanta, who had thought about spending more this Christmas.

"We have cut back assuming that Congress and the president and the country are going to go over the fiscal cliff. And we're hopeful, though, that they can work together and figure something out and do what's best for this country," Hill said.


What is the U.S. Fiscal Cliff?

  • An agreement intended to force politicians to compromise and make deals.
  • Without a deal by January 1, 2013, sharp spending cuts would hit military and social programs.
  • Tax hikes also would go into effect.
  • The combination would reduce economic activity, and could boost unemployment and push the nation back into recession.
Time to reach a deal, however, is quickly running out. Across-the-board tax hikes and deep spending cuts take effect on January 1 unless the president and lawmakers reach some sort of agreement. The latest polling from the Gallup Organization shows only 50 percent of Americans still think a deal is possible - almost 10 percentage points fewer than one month ago.

Gallup Editor-in-Chief Frank Newport said, "One thing that really comes through in the data, in our Gallup polling and in other polls, is how much Americans think that their elected representatives in the nation's capital should compromise. The public out there strongly says compromise. Figure out a way to give in some on your principles so you reach an agreement."

In an environment where politicians are so often led by public opinion, however, Gallup said the public has not been able to offer up any solutions.

Still, Marc Goldwein with the Committee for a Responsible Federal Budget is somewhat optimistic. He said, "If you look at where the president was and where the speaker [Republican House Speaker John Boehner] was just a week or so ago, they were so close. There's definitely differences to be hammered out and it's not clear we can do that in a week but they're so close that I do hold out some hope that we can get back to that go-big mentality."

Some analysts worry anything less than a comprehensive solution on taxes and spending  - any deal that just delays the most difficult budget choices - will make the problems more difficult to solve.

And Don Kettl, dean of the School of Public Policy at the University of Maryland, said the ramifications go beyond America's borders - with the rest of the world looking in.

"They're looking at us not only in terms of why can't we get our budget act together, but also there's a more fundamental question of whether the U.S. can lead and govern any longer," he said.

Kettl puts the odds of getting a deal by the New Year's deadline at 50-50. He said in some ways it gets back to high-stakes politics - neither the president nor Republican lawmakers wanting to look like they were the one who gave in first.

Jeff Seldin

Jeff works out of VOA’s Washington headquarters covering a wide variety of subjects, from the nature of the growing terror threat in Northern Africa to China’s crackdown on Tibet and the struggle over immigration reform in the United States. You can follow Jeff on Twitter at @jseldin or on Google Plus.

You May Like

Multimedia Obama Defends Immigration Action

Obama says with his executive action on immigration, enforcement resources will be focused on 'felons, not families; criminals, not children' More

US-Led Airstrikes in Syria Kill Over 900: Monitoring Group

British-based Syrian Observatory for Human Rights says the toll includes more than 50 civilians, five of them women and eight of them children More

Report: Obama Broadens US Combat Role in Afghanistan

The New York Times says resident Barack Obama has signed a classified order extending the role of US troops in Afghanistan for another year More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
New Skateboard Defies Gravityi
X
November 21, 2014 5:07 AM
A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.
Video

Video Tensions Build on Korean Peninsula Amid Military Drills

It has been another tense week on the Korean peninsula as Pyongyang threatened to again test nuclear weapons while the U.S. and South Korean forces held joint military exercises in a show of force. VOA’s Brian Padden reports from the Kunsan Air Base in South Korea.
Video

Video Mama Sarah Obama Honored at UN Women’s Entrepreneurship Day

President Barack Obama's step-grandmother is in the United States to raise money to build a $12 million school and hospital center in Kogelo, Kenya, the birthplace of the president's father, Barack Obama, Sr. She was honored for her decades of work to aid poor Kenyans at a Women's Entrepreneurship Day at the United Nations.
Video

Video Gay Evangelicals Argue That Bible Does Not Condemn Homosexuality

More than 30 U.S. states now recognize same-sex marriages, and an increasing number of mainline American churches are blessing them. But evangelical church members- which account for around 30 percent of the U.S. adult population - believe the Bible unequivocally condemns homosexuality. VOA's Jerome Socolovsky reports that gay, lesbian, bisexual and transgender evangelicals are coming out. Backed by a prominent evangelical scholar, they argue that the traditional reading of the bible is wrong.
Video

Video Ebola Economic Toll Stirs W. Africa Food Security Concerns

The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Mexico Protests Escalate Over Disappearances

Protests in Mexico over 43 students missing since September continue to escalate, reflecting growing anger among Mexicans about a political system they view as corrupt, and increasingly tainted by the drug trade. Mounting outrage over the disappearances is now focused on the government of President Enrique Pena Nieto, accused of not doing enough to end insecurity in the country. More from VOA's Victoria Macchi.
Video

Video US Senate Votes Down Controversial Oil Pipeline - For Now

The U.S. Senate has rejected construction of a controversial pipeline to transport Canadian oil to American refineries. The $5 billion project still could be approved next year, but it faces a possible veto by President Barack Obama. As VOA’s Michael Bowman reports, the pipeline has exposed deep divisions in Congress about America’s energy future.
Video

Video Can Minsk Cease-fire Agreement Hold?

Growing tensions between government troops and separatists in eastern Ukraine further threaten a cease-fire agreement reached two months ago in the Belarusian capital of Minsk. Critics of U.S. policy in Ukraine say it is time the Obama administration gives up on that much-violated cease-fire and moves toward a new deal with Russia. VOA's Scott Stearns has more.
Video

Video Chaos, Abuse Defy Solution in Libya

The political and security crisis in Libya is deepening, with competing governments and, according to Amnesty International, widespread human rights violations committed with impunity. VOA’s Al Pessin reports from London.
Video

Video US Hosts Record 866,000 Foreign Students

Close to 900,000 international students are studying at American universities and colleges, more than ever before. About half of them come from Asia, mostly China. The United States hosts more foreign students than any other country in the world, and its foreign student population is steadily growing. Zlatica Hoke reports.
Video

Video Ferguson Church Grapples with Race Relations

Many white residents of Ferguson, Missouri, say they chose to live there because of the American Midwest community's diversity. So, they were shocked when a white police officer killed an unarmed black teenager in August – and shaken by the resulting protests and violence. Some local churches are leading conversations on how to go forward. VOA’s Ayesha Tanzeem reports.

All About America

AppleAndroid