WASHINGTON (AP) - Congress and the White House can soften the initial impact of "fiscal cliff" tax increases and spending cuts if they fail to reach a compromise by Dec. 31. But one thing they can't control is the financial markets' reaction, which possibly could be a panicky sell-off that triggers economic reversals worldwide.
The markets' unpredictability is perhaps the biggest wild card in the political showdown over the so-called fiscal cliff.
Republican lawmakers increasingly recognize that President Barack Obama's re-election gives him a strong negotiating hand. Some Democrats say it would be even stronger if the deadline passed without a deal because the resulting tax increases on virtually everyone would pressure Republicans to give more ground in January. Still, tempering that confidence is the fear that stocks could plummet in the meantime.
To comment, the following rules must be followed:
Comments may be monitored for inappropriate content, but the station is under no legal obligation to do so.
If you believe a comment violates the above rules, please use the Flagging Tool to alert a Moderator.
Flagging does not guarantee removal.
Multiple violations may result in account suspension.
Decisions to suspend or unsuspend accounts are made by Station Moderators.
Questions may be sent to firstname.lastname@example.org. Please provide detailed information.