Avoiding the fiscal cliff could be a temporary fix

INDIANAPOLIS (WISH) - The fiscal cliff deadline came and went and still no vote was taken by lawmakers. While the clock was ticking on New Years Eve, the White House and Congressional Republicans agreed to block across the board tax increases set for midnight, but they still hadn’t reached a deal on spending cuts.       

Political and economic expert David Millard with Barnes and Thornburg in Indianapolis says the decisions lawmakers are making in Washington will have a major impact on the country’s economy. “The ripple effect of our economy losing gas is going to have an impact all over the world and runs the risk of not only dragging the US back into a recession but the entire world with it,” says Millard.

David Millard is closely following what's happening in Washington and the chances of the country falling off the fiscal cliff. He says, if an agreement isn't passed in the senate or the house people at home could immediately feel the impact. “For the average person everybody's taxes are going to go up so even middle class taxes are going to go up, what middle class people are going to see primarily immediately the withholdings are going to go up because the employers withhold from each paycheck and that has to match the current tax rates,” says Millard.

Millard says, even if an agreement is made in time it likely won't be what's needed to solve the bigger issues. He points out a committee had an entire year to find a solution and they didn't and now in the final hours leaders have patched together a band aid deal. “Its going to be a very small agreement. It's going to be the least they can do to kick the can down the road until next year,” says Millard.

Late Tuesday night, Congress passed legislation to avoid the fiscal cliff.

The bill passed the House 257-167.