As fiscal cliff approaches, businesses start to prepare
As the fiscal cliff approaches at the star of next year, businesses are starting to prepare.
There are only 68 days until the end of the year -- which doesn't give Congress much time to hash out a solution to the looming fiscal cliff, $600 billion in automatic tax increases and spending cuts. That has a lot of companies worried, and many taking action.
Many companies are holding back on new hiring and investment. GE recently announced that it's reducing its debt to avoid higher possible interest rates, and JPMorgan created a war room.
Scott Talbott, a senior vice president at the Financial Services Roundtable, confirmed the war room. He says that the companies he works for, big corporations like Visa and JPMorgan, detest uncertainty in the market, "and the fiscal cliff creates a large amount of uncertainty," he says.
That uncertainty is also a big worry for retailers. David French runs government relations for the National Retail Federation. Retailers are worried that talk of tax increases could spook consumers in the midst of holiday shopping.
"Our members are concerned they would become innocent bystanders," he says.
Both groups have also taken action by making their case to Congress for how to avoid the fiscal cliff.
Need an easy explainer on the fiscal cliff? Sr. Producer Paddy Hirsch breaks it down with a Hollywood analogy in this Whiteboard video: