Lawmakers may cut a deal to avert the fiscal cliff by Dec. 31. Or they may not.
If they don't, paychecks in January will get smaller and millions of workers may face weeks of uncertainty about their what their true take-home pay will be. Families that live paycheck to paycheck could feel the sting of limbo most acutely...
If Geithner tells the IRS not to change the withholding tables, that effectively would mean employers in January would not withhold any more money for income taxes than they do today.
That might be a tempting option if the White House and Geithner strongly believe lawmakers are on the verge of passing a deal in early 2013.
If a deal is not imminent, however, the Obama administration might not want to mute the pain of tax hikes since it would light a fire under negotiators to finalize a deal, said Steve Bell, economic policy director of the Bipartisan Policy Center.