United States fiscal cliff

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The fiscal cliff ( also on fiscal cliff, fiscal cliff or household cliff, english fiscal cliff ) in the budgetary debate of the United States describes the fact that at the end of the year end in 2012 various tax cuts and at the same time must contact spending cuts in force, so that the public debt of the United States a does not exceed the prescribed maximum value. The fiscal cliff is therefore, be compared with the debt brake.

The drastic reduction associated the budget deficit from the year 2013 is expected to greatly dampen the economic growth forecast, if growth policy countermeasures are not resolved. The deficit - the difference between the government's revenues and its spending - is expected to cut in half by the fiscal cliff in 2013. The Congressional Budget Office (CBO ) estimates, however, that the sudden cuts will likely lead to a recession in early 2013 and the economic activity comes only after 2013 momentum.

The laws that lead to the fiscal cliff, tax increases through the elimination of tax breaks from the Bush era ( Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010) and spending cuts in the budgetary control Decision include (English Budget Control Act ) of 2011. the Budget Control Act was due to the failure of the 111ten Congress to approve a state budget, adopted and was a compromise in order to tackle the debt crisis in the United States. The Republicans in Congress refused to agree to an increase in the maximum tax rate, unless it would at the same time deep cuts in spending decided to come closer to a balanced budget and to reduce the amount of national debt that had accumulated. The Budget Control Act also includes an immediate increase in the debt ceiling, along with a mechanism that allows two further increases. It additionally provides automatic spending cuts starting on Jan. 2, 2013, before.

It is predicted that due to the fiscal cliff in fiscal year 2012-2013 to 19.63 % increase tax revenues annually and spending will fall by 0.25 % per year. These changes would the tax revenue at around its historical average of 18% of GDP, attributed. The nominal expenditure remained about the same height and are consistent with the level of 2009. Several major programs, such as Social Security, Medicaid, government wages (including Sölde and pensions) and Veterans benefits would be exempt from the cuts. Spending on federal agencies and ministries would by extensive incisions - lowered - the so-called "budget sequestration ". The deficit reduction is aimed at slowing down the growth of debt of the United States. Although they were growing further, the expected debt would fail in the next ten years by 7.1 trillion U.S. dollars, or 70 %, lower. This would have a lower ratio of debt to economic output (GDP ) result. Because of their short-term impact on the economy, including a possible recession, these changes have caused strong reactions, both inside and outside of Congress. It was required to extend some or all of the tax cuts and replace the savings on a broad front with targeted cuts.

In addition, the debate can be heated by the expectation that the debt ceiling will be reached before the end of 2012, unless " extraordinary measures " to be taken. Almost all the suggestions to circumvent the fiscal cliff include an extension of some parts of the Tax Relief Act of 2010 or the Budget Control Act of 2011 to amend or both, which in turn increases the deficit by lower taxes and / or higher costs.