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We're Already Feeling the Fiscal Cliff

Report says threat has cost US 1M jobs this year
By Matt Cantor,  Newser Staff
Posted Oct 26, 2012 7:40 AM CDT
We're Already Feeling the Fiscal Cliff
In this Sept. 21, 2012 file photo, House Speaker John Boehner of Ohio gestures during a news conference on Capitol Hill in Washington.   (AP Photo/J. Scott Applewhite, File)

(Newser) – We're not supposed to go over the "fiscal cliff"—an array of budget cuts and tax hikes that could cut $500 billion out of the economy—until January. But the US is already feeling the effects of the impending budget uncertainty, a report by the National Association of Manufacturers finds. It says 1 million jobs have been lost this year as companies retrench in advance, reports the Washington Post, and it warns things will get worse if lawmakers fail to find agreement: Unemployment up to almost 12%, six million jobs eliminated through 2014. (The CBO has a less dire forecast.)

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Many companies have been cutting jobs and delaying purchases, the reports says. "I don’t think the political leadership in this country has an understanding of how long it could take to turn this boat around," says one worried business owner whose company has cut 150 jobs in recent months. "Even if you think there’s not much of a chance of this happening, businesses and consumers are still worried," notes the analyst who organized the report. In fact, "we’ve probably already lost 0.5% of GDP growth in 2012, just from the fiscal cliff hovering over our heads." Still, a glimmer of hope: 80 top CEOs yesterday said they'd accept higher taxes alongside spending cuts in an effort to cut the debt, thus pointing the way toward a potential deal to avoid the cliff. (Read more Congress stories.)

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