While much of the impact of the fiscal cliff was avoided with legislation passed by Congress, there will still be economic effects.
President Obama signed the package in to law Wednesday night. It extends unemployment benefits and delays $24 billion in automatic spending cuts by two months.
No action was taken to extend a 2 percent payroll tax break, which means less money in your paycheck. John Bartle, acting dean of UNO’s College of Public Affairs and Community Service, says cutting the payroll tax to 4.2 percent was a good idea at the time it was done, given economic conditions then. He says while it’ll have some economic impact now, it’ll also pay for Social Security.
Bartle believes the U.S. economy would have slid in to a recession without a deal to avert the fiscal cliff. And he expects the new Congress will be dealing with many of the same fiscal cliff issues two months from now, when the package passed by lawmakers expires.