Obama faces challenges as 'fiscal cliff' looms

November 7, 2012 (CHICAGO)

On Wednesday, congressional leaders hinted at compromise.

"Mr. President, the Republican majority here in the House stands ready to work with you," said Republican John Boehner, Speaker of The House.

"I'm going to do everything within my power to be as conciliatory as possible. I want to work together," said Sen. Harry Reid, (D) Senate Majority Leader.

The fiscal cliff is compared to a slow-motion train wreck. If the two sides do not work together, it will mean higher taxes, with spending cuts automatically kicking in. Economists say in the worst-case scenario it would trigger a self-inflicted recession.

"We need to have a fiscal plan in place for the next 10 years and that will really make a lot of good to our economy because it will give us the confidence that these big, big issues are being addressed," said Adolfo Laurenti, deputy chief economist, Mesirow Financial.

In comparison, budget cuts sparked riots in Greece on Wednesday. And there is word that Germany too is facing economic challenges.

"Just by looking at the numbers, we are very, very close to a European-like situation," said Laurenti. Click here to watch Laurenti's full interview

So after the president's victory, political experts say the Republican establishment may have to rein in the tea party.

"I think the tea party took a big hit, and they may be pushed to the fringe, to the side. I think the moderates need to take the leadership and tell the conservatives to get in line," said Laura Washington, ABC 7 political analyst.

This may sound familiar. In August of 2011, the financial crisis was in the forefront. At that time, political leaders could not reach a long-term solution so they essentially kicked the can down the road. And we are at the crossroads right now.

If you have an opinion, the best option may be to call your elected officials.

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