Talking Points: The Risk Of A Fiscal Cliff

MINNEAPOLIS (WCCO) -- The President and Republicans are taking a break in their negotiations over a deal to avoid the Fiscal Cliff.

The talks are expected to continue after Thanksgiving. If a deal isn't reached, taxes on all Americans will go up and billions of dollars of cuts in military, education and health care spending will go into effect.

A deal has to be reached by Jan. 1.

The biggest impact will be if no agreement is reached -- everyone's taxes will go up. One estimate says a family earning $80,000 a year will pay $3,500 more in taxes.

There will also be a 10-percent cut in nearly all defense programs and $55 billion will also be cut from non-military programs -- everything from aide to local schools, food inspections and air travel safety will be slashed.

With so much at stake, there is pressure on both sides to reach a deal. The President has said he wants those earning more than $250,000 a year to pay more in taxes. But two years ago, the President backed down on that very issue.

Democrats say that won't happen again. Sen. Al Franken appeared on WCCO Sunday Morning.

"We want to do that and then after that, they expire and we go back to the Clinton tax rates -- over $250,000. During the Clinton administration, we created 22.7 million jobs. There is no evidence that upper tax rate would hurt job creation at all," he said.

In the end, compromise may be a name game. Republicans say they won't back a tax increase for the wealthy, but they will support "additional revenue streams."

That would involve closing tax loopholes. And limiting certain deductions. And the Republicans after losing the Presidential race may feel more pressure to compromise. Opinion polls say if a deal doesn't happen most Americans will blame Republicans in Congress and not the President.

You can watch WCCO Sunday Morning with Esme Murphy and Matt Brickman every Sunday at 6 a.m. and 10:30 a.m.