And that will tend to be supportive of the economy. So that has an automatic stabilizertype effect. It offsets adverse shocks. Reporter as it turns out, the fed expects the Unemployment Rate to fall below 6. 5 until 2015, exactly when the fed said a few months ago it expected to begin raising Interest Rates. So this isnt much of a change in policy. Bernanke also said the central bank will continue buying bonds, 85 billion a month, to help bring down Interest Rates and boost growth. And the fed plans to keep doing that until the labor market shows a solid pickup or there are other signs of trouble. If future evidence suggests that the programs effectiveness has declined, or if potential unintended side effects or risks become apparent as the Balance Sheet grows, we will modify the program as appropriate. Reporter the fed will also look at broader measures of the labor market including the hours people are working and payroll growth. But the Unemployment Rate target still raises some con
To see if were able, on a bipartisan basis to move forward. Reporter Senate Majority leader harry reid said he too would try to reach agreement. But that was after spending most of the day hammering away at House Republicans. Reid blamed the current stand off on the inability of House Republicans to pass their own plan which would have extended tax breaks for everyone making less than a Million Dollars a year. Its the mother of all debacles. That was brought up in an effort to send us something. He couldnt even pass it among the republicans it was so absurd. He meaning the speaker. So its very clear now mr. President that the speakers number one goal is to get elected speaker on january 3. Reporter january 3 is the deadline for the new congress to start work. If a fiscal cliff fix isnt passed by then, the start of a new congress will likely delay matters even more. Which is why the focus now is on reaching a nanodeal. The minimal that they can put together to avoid the fiscal cliff whi
His case. Here we are at the eleventh hour, and the president still isnt serious about dealing with this issue right here. Its this issue spending. Reporter the president left his spokesman to respond that republicans were pushing a plan of fantasy economics that raised more revenues while also cutting taxes on the wealthy. What spending cuts have the republicans put forward . The proposal that weve seen is a twopage letter, and the much discussed second proposal is less than half a page. There is no specificity behind what the republicans have put forward. Reporter right now, the risk is rising that we will avoid the fiscal cliff, but end up with what some call a worst case outcome. We get some sort of hoaky deal thats put together with gimmicks and baseline adjustments and all that stuff. They get by the fiscal cliff without much damage. Wall street breathes a sigh of relief, but weve done nothing for the longer term debttogdp ratio. Worst of all, most of what they do will take effec
Supportive of the economy. So that has an automatic stabilizertype effect. It offsets adverse shocks. Reporter as it turns out, the fed expects the Unemployment Rate to fall below 6. 5 until 2015, exactly when the fed said a few months ago it expected to begin raising Interest Rates. So this isnt much of a change in policy. Bernanke also said the central bank will continue buying bonds, 85 billion a month, to help bring down Interest Rates and boost growth. And the fed plans to keep doing that until the labor market shows a solid pickup or there are other signs of trouble. If future evidence suggests that the programs effectiveness has declined, or if potential unintended side effects or risks become apparent as the Balance Sheet grows, we will modify the program as appropriate. Reporter the fed will also look at broader measures of the labor market including the hours people are working and payroll growth. But the Unemployment Rate target still raises some concerns. The Unemployment R
And economists warn the economic effects will be felt quickly if 600 billion in automatic tax increases and spending cuts begin to take effect next year. At this rate, it looks like lawmakers will celebrate new years eve at work if not resolving the fiscal cliff, at least trying to avoid the blame. Darren gersh, nbr, washington. Susie going over the fiscal cliff will not only have an impact on the national level, it will also hit states and eventually cities. If lawmakers fail to reach a deal before january 1, the cliffs across the board spending cuts and tax increases will impact how much money states get from the federal government. Ruben ramirez reports from washington. Reporter we all know the numbers. Failing to reach a deal by january 1 will result in 109 billion in automatic cuts to federal spending. And while thats a big number, what matters most to states and municipalities is the small print, detailing just where those cuts will happen. And Standard Poors gabe pettek says tho