John Santos
News Editor
Unless you’ve been living under a rock, you’ve probably heard the phrase “fiscal cliff” uttered in the news in the past couple of months. The phrase refers to automatic government spending cuts that would take place if Congress couldn’t make a budget deal for 2013. On Wednesday, January 2, President Barack Obama signed a deal that would ward off the automatic cuts, at least temporarily.
The deal marks the first time in 20 years that Republicans voted to increase tax rates. Tax rates went up for Americans who make more than $400,000, which means 98 percent of Americans saw no tax hike. The deal is good news for the housing market. Mortgage interest deduction and long-term tax relief on mortgage debt were extended, which should help housing sales.
But what does the deal mean for college-bound high school students? Federal aid and research funding to universities were among programs originally planned to face spending cuts if an agreement was not made. The bill signed by Obama will hold these cuts off for the short-term. But no one is in the clear yet.
Congress will face another standoff as early as February when the White House will again ask to raise the debt ceiling. If Congress cannot negotiate a final budget deal by March 1, 2013, there will be across the board spending cuts.
