TIME BOMB

Senate Works to Avoid ‘Fiscal Cliff’

Deep cuts, tax hikes kick in January 1.

Hoping to avoid another circus like the one that surrounded the “debt ceiling” last summer, Senate leaders are hard at work on a path to avoid the so-called fiscal cliff—a series of dramatic tax hikes and deep spending cuts—that will automatically trigger on January 1, 2013, unless Congress intervenes. The triggers were established in the 2011 deal to be equally distasteful to both parties and to force a solution. Senators are still nowhere near a deal, and House Republicans still adamantly resist any tax increases, but a bipartisan group is coalescing around a three-step plan that would agree on broad deficit reduction, likely to come from federal spending cuts and closing tax loopholes.