Fiscal Cliff fears rising as deadline looms - NEWS10 ABC: Albany, New York News, Weather, Sports

Fiscal Cliff fears rising as deadline looms

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ALBANY, N.Y. - As lawmakers continue to negotiate decisions regarding the so called ‘fiscal cliff,' many Americans are wondering what exactly it could mean for them in the New Year.

Monday marks the end of a payroll tax cut. If Congress does not extend it you can expect to see your paycheck get smaller in 2013 as the amount of social security tax taken out of your paycheck will go from the current 4.2 percent back up to 6.2 percent.

For small business owner Carl Donley, the change could prove devastating.

"It affects me as a business owner and it's going to make it more difficult for me to employ more people and make more jobs so it's difficult," said Donley.

Others are concerned they won't have anything left to spend with the paycheck reduction, creating a slow growing economy.

"I don't understand so I really don't get into it," said Thomas VanAlystne.

"I'm not sure but I think economically everything is going to cost us more," said Efrosini Frankel.

Costing more is definitely a forseable outcome of the financial crisis lawmakers are struggling to resolve. So what exactly is the fiscal cliff?

"What the fiscal cliff means is that effective January 1st unless something is passed by both houses automatic spending cuts and automatic tax increases will go into place," said Sandy Family with Sanford Family Financials. 

"It means for those that earn approximately $40,000 a year an additional $83 dollars a month of taxes will be paid into social security," said Family.

Financial Advisor Sandy Family says the best thing for people to do right now is wait out the decisions on this fiscal cliff before making any major financial decisions.

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