Federal Reserve Chairman Ben Bernanke warned in a Congressional testimony Tuesday about the dangers of dropping off the fiscal cliff at the end of 2012. Meanwhile, Congressional Democrats say they will let the Bush-era tax cuts expire at the end of the year if Republicans do not compromise on spending cuts before the deadline.
"Fiscal decisions should take into account the fragility of the recovery," Bernanke says. "That recovery could be endangered by the confluence of tax increases and spending reductions that will take effect early next year if no legislative action is taken."
Soledad O'Brien speaks with Senator Richard Blumenthal (D-CT) on CNN's "Starting Point" about the approaching fiscal cliff. Sen. Blumenthal says Congress should be passing an extention of the tax cuts for households earning less than $250 thousand per year in order to provide the economy with some stability.
Sen. Blumenthal also says that if given the choice of either extending tax cuts for all Americans or ending the tax cuts for all Americans he would vote to extend them, "I think that fiscal cliff is so ominous and so potentially destructive that we need to avoid it." Sen. Blumenthal adds, "We also need to address the need for cuts in spending. I think a balanced approach is the optimal way to go."