The average overdraft charge rose 3% in 2013, to a record $32.20, Bankrate says. (Image courtesy: Associated Press)
GRAND RAPIDS (WZZM) -- The looming "fiscal cliff" is approaching, and if the White House and Congress doesn't act you could be affected.
President Obama and lawmakers have until the end of the year to reach a deal before automatic tax increases and deep spending reductions kick in.
If there is no agreement, the first thing to go would be the tax cuts that came under President George W. Bush. If you are single and make $40,000, you would have to pay $400 more a year. A couple making $80,000 might have to pay $2,200. If you have children, the child tax credit would drop from $1000 to $500. The capital gains tax you pay on the profit from selling a home or stocks would go up, too.
Beyond the rolling back of tax cuts, across-the-board federal spending cuts would have an affect on your daily life. For example, if departments like the Food and Drug Administration and Federal Aviation Administration are cut, fewer people might be inspecting our food and checking our planes. There would be less money for road repairs and children programs.
"Child nutrition programs, school lunch programs -- things that kids get in school," says John Tiemstra, a Calvin College economics professor emeritus. "Those dollars are going to shrink."
College students would not be safe from cuts.
"This biggest thing that will affect students will be the cuts in Pell Grants," explains Tiemstra. "There will not be enough financial aid."
The search for work could get tougher, says the professor.
"If our economy gets tipped back in to recession and we start seeing unemployment going up again, then it will harder to find work," says Tiemstra.
President and Congressional leaders have promised to find a solution to avoid the fiscal cliff.