How far over the 'fiscal cliff' could they go?

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Associated Press

Posted on December 6, 2012 at 3:03 AM

Updated Thursday, Dec 6 at 7:01 AM

WASHINGTON (AP) — The Washington dealmakers who warn that a plunge off the "fiscal cliff" would be disastrous don't seem to be rushing to stop it. Why aren't they panicking?

For one thing, the Dec. 31 deadline is more flexible than it sounds. Negotiators know they can finagle more time if they need it.

That doesn't mean delay would be cost-free. Stock markets might tank if 2013 dawns without a deal, but Americans could be temporarily spared many other ill effects.

The Obama administration could delay some of the tax increases and spending cuts. Then, if an agreement is reached with Congress early in the year, it could be applied retroactively to wipe them out.

Some lawmakers even argue that going over the cliff briefly is the best way to force a compromise.

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