Impact of falling off fiscal cliff

APPLETON - Democrats and Republicans have yet to come together to discuss dodging the looming fiscal cliff, but both sides already differ on solutions.

“I refuse to accept any approach that isn't balanced,” said President Barack Obama.

President Obama says any solution must include tax increases for the wealthy. However, House Speaker John Boehner says he would rather see reforms in the country's tax structure.

“It'll bring jobs back to America,” said Boehner. “It'll bring more revenue.”

Both sides agree something needs to be done, but Lawrence University Economics professor Merton Finkler says that isn't necessarily the case.

“Is going over the fiscal cliff the worst thing that ever happened? Probably not,” said Finkler. “Is it negative? Probably so.”

Finkler says it depends on the solution reached. He says choosing the wrong one could make things worse.

“A bunch of short terms ends up being a long term that's not very good,” said Finkler.

Finkler points to a Congressional Budget Office report released earlier this week. It shows if current laws remain unchanged economic growth would decrease half a percentage point and unemployment would be 9.1% That's compared to extending current tax policies. The report shows economic growth would increase 1.7% and unemployment would be about 8%. The second option looks better, but the report shows it would mean about an extra $500 billion on the fiscal year's budget deficit.

Finlker says a short-term solution likely isn't the answer.

“If that's all we do, then we don't provide any incentive for businesses to think about long-term commitments to expanding, to hiring, to things of that sort,” said Finkler.

Lawmakers from both sides are expected to start discussing solutions next week.