Even if "fiscal cliff" is avoided, paychecks are already smaller - 13 WTHR Indianapolis

Even if "fiscal cliff" is avoided, paychecks are already smaller

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INDIANAPOLIS -

No matter when the "fiscal cliff" situation is resolved, you're already likely to see less money in your paycheck. That's because a temporary reduction in Social Security taxes goes away Tuesday.

On Tuesday, we learned state employees are already seeing the change.

Cindy Moore spent a good portion of the first day of the new year on her laptop. She was reading about the expiration of the Middle Class Tax Act. "Starting with our first paycheck here in January which will hit our bank accounts tomorrow."

As a academic advisor at Indiana University, Moore is a state employee. As such, she was notified about the two-percent increase in the Social Security tax rate before Christmas.

So for now, all eyes are on Washington.  The deal worked out in the Senate increases the estate tax, extends unemployment benefits and brings back higher, Clinton-era tax rates on top earners. 

Democrats made a concession by increasing the income threshold for tax cut extensions, from households earning $250,000, reportedly to those making $450,000 a year.  The controversial spending cuts are now postponed for at least the next two months.

"I think Congress just needs to get this done and quit putting this off to the last minute and causing all Americans all this worry and heartache," Moore said.

The controversial spending cuts are not postponed for at least the next two months.

"I personally don't like it because I think we're kicking the can down the road and we aren't really addressing the real crisis," said Sen. Rand Paul. "Really, to tell you the truth, it was not the fiscal cliff, it's a debt crisis."

The watching and the waiting is taking a toll on Americans like Moore who are just trying to get by.

"A lot of times I feel overwhelmed and I am sure there are a lot of people who feel this way and this little issue just makes it worse," she said.

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