Without action in Washington, people could see an increase in taxes and cuts to services come January. It's the so-called fiscal cliff, and our Beth Croughan spoke with area financial planners to find out how we could be affected.
ALBANY, N.Y. -- The Bush-era tax cuts are set to expire at the end of this year and certain spending cuts are expected to go into effect.
Those, combined with a weak economy... "Many feel will cause us to go over this so-called fiscal cliff, which could send us right back into a recession," said Leonard Valletta of the Albany Financial Group.
President Obama met with leaders in Congress Friday to work on a deal before New Year's Day. He wants to increase taxes on the top two percent, something the GOP has called a "job-killer." But after the conversation, both sides said they'll work to find a balance.
"I can't imagine having 18 months to work on this, that people in Washington will be able to put something together in the next few weeks," said Steven Bouchey of Bouchey Financial Group Ltd.
If no deal is reached, we'll see tax increases and if we do head into another recession, Bouchey said everyone will be affected.
"For investors, you'll see the stock market go down and it won't be pretty. But also, for people that may not realize it, people on Social Security," said Bouchey.
But for those with money in the market, Valletta said it's a mistake to make any moves.
"We're already seeing a lot of volatility, and so when President Obama got elected, there's many who felt like the chances of the fiscal cliff improve, whether or not that's going to happen, we'll find out. I think a compromise is actually pretty likely. What form it takes, obviously time will tell," he said.
Friday's meeting to discuss the deficit was the first for the group since the election.