On January 1, 2013 the Bush tax cuts are set to expire resulting in increased rates for higher education, tax-hikes, spending cuts and layoffs across many government programs.
For higher education this means less money for scientific research, laboratories, financial grants, and federal investments which would force school administrators to pass that cost on to their students. According to NASSGAP, cuts would reach 7.6 to 8.4% for many educational programs and up to 10% in cuts for federal education programs.
According to the Fort Worth Star-Telegram, the fiscal cliff could bring on a new recession and stunt innovation and the future of science in the United States. Further the cuts could stunt scientific programs that are currently working on everything from cancer research to new energy and reduce the number of trained scientist for the future.
While the Pell Grant program is protected, fewer scholarship options and increased cost may cause many students to leave school or turn to two-year colleges. Moreover, for students looking to take out loans to pay for their education the fiscal-cliff would bring increased loan rates. This is especially devastating for lower-income students who may not be able to afford college and for employers looking for educated workers.
The main hang up on the decision to avoid the fiscal cliff springs from the last session of Congress where Democrats and Republicans were split on raising taxes on citizens who earn over 200,000 per year as well as a disagreement over entitlement reform. Mainly Republicans do not want to raise taxes on any citizens while Democrats want to raise taxes for those who make over 200,000 a year and Republicans want an overhaul of the social security, medicare, and medicaid programs.
CNN offered two options to ensure that both parties can come to a compromise. One option is to raise tax rates and cut tax breaks, yet there will still be some disagreement over which income bracket receives the tax rates. The second option is to cap tax breaks on the higher income brackets which is something the Republicans are against.
Either way you look at it, it seems as if a compromise will be necessary for both sides to come to an agreement and settle the fiscal cliff dilemma.