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Home > News and Opinion > Re-Elected U.S President To Tackle Big Fiscal Cliff Issue

Re-Elected U.S President To Tackle Big Fiscal Cliff Issue

George Sterling | Wednesday, November 7th, 2012

The United States Presidential elections concluded last night but the new and re-elected President of the country has to deal with a big challenge right away: the challenge of “fiscal cliff”, which is a combination of both, tax hikes and budget spending cuts to save $600 billion from the U.S economy. The ‘fiscal cliff’ issue is a result of a new deal with the U.S Congress.

If the re-elected President of United States fails to tackle two issues with the broad fiscal cliff concern, it would push the economy into recession. The fiscal cliff has two different issues; one includes separate tax cuts on individuals that will expire by the end of this year and on the other hand, billions of dollars that should be saved from federal spending by making federal cuts that will kick in after New Years Day.

According to Democrats and budget experts, if the President doesn’t shake hands with the Washington policy makers before the 31st of December, he would risk another recession that will most likely sink in the 1st half of next year. On the other hand, supporters of the President suggest that his win will allow him to strike an exclusive “grand bargain” that he pursued during the first four years of his Presidency. Such as bargain will let him increase revenue and bring amendments to known programs such as the U.S Medicare health program and gradually decrease the U.S federal deficit.

The biggest issue between the democrats and republicans is that of taxation. While Barack’s opponent Romney wanted to pursue low taxation for the supremely rich, Obama wants to increase taxes on the wealthy. The Republicans will maintain control of the House while the Democrats will have control over the senate.

The biggest issue of his next four year term, the fiscal cliff, currently stands to be addressed right after Barack Obama was announced the President of the United States. The fate of the global economy, stock markets and commodity/assets prices all depend on how Obama will tackle this significant issue.

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