An excerpt of Benjamin Landy's Blog of the Century Graph of the Day:
Originally called "taxmageddon," it is revealing that policymakers and journalists eventually settled on the less apocalyptic "fiscal cliff" to describe the $607 billion of tax cuts and stimulus spending scheduled to expire at the end of the year. The image of a cliffâliterally something that you either fall off or walk away fromâis oddly appropriate for Washington, where Republican obstructionism has made it increasingly likely that Congress will kick the can down the road rather than take the plunge and negotiate a timely compromise.
Andrew Fieldhouse, a fellow at The Century Foundation and the Economic Policy institute, and Josh Bivens, also at EPI, are somewhat more optimistic. They suggest Congress could approach the expiring provisions like a "fiscal obstacle course," with several separable policies. Some, like the Bush-era tax cut for high income households, add hugely to the deficit while contributing little to overall economic growth. Others, like the payroll tax cut and expanded unemployment insurance, have a much more positive impact on GDP and employment levels while costing comparatively little. The report concludes that policymakers could achieve the best of both worlds deficit reduction and sustained economic growth with just $415 billion of well-targeted stimulus, rather than the $732 billion cost of extending 2012 spending
See more graphs here.