Updated: 11/12/2012 9:39 AM KSTP.com By: Beth McDonough
Have you heard of the fiscal cliff?
If President Obama and Congress fail to make a deal on taxes and the deficit, the economy could go over a cliff. You'll automatically see tax hikes and spending cuts. The magnitude and abruptness of which earned it the nickname fiscal cliff.
Tom Eggum, of St. Paul, knows what it's like to live on the edge. Downtown St. Paul is in front of him, the Mississippi River flows below him. He's lived on the bluffs for 40 years. Eggum believes the fiscal cliff is as perilous as the one by his home, "bad things might happen if it's not resolved."
Especially for Eggum. He's a 67-year-old retiree and he works part-time. He gets a pension and a paycheck. Like other middle-income Minnesotans his taxes could go up an average of $3,500 dollars a year come January. And his after tax income might fall 4 percent, noticeable numbers to him.
That's not all. Eggum is on Medicare. With the fiscal cliff comes a 30 percent cut in Medicare payments to doctors, patients make up the difference.
Jay Kiedrowski is an economic analyst at the University of Minnesota. He says just about every government program would be trimmed, except for social security and veteran's benefits. His advice to lawmakers: "put in place a long-term plan to reduce the deficit but in the short-run make sure it's not so severe that it pushes the United States into recession."