The fiscal cliff looms large. It should. Unless Washington does something, 2013 will face a sudden and automatic fiscal restraint. The shock would almost certainly drive this economy's already enfeebled recovery into recession. It is a frightening prospect, to be sure, but, still, likelihoods suggest that even this Congress will steer clear such a cliff.

Warnings on this matter have emerged through several channels. Federal Reserve Board Chairman Ben Bernanke, at last summer's testimony on monetary policy, forcefully called Congress' attention to the impending problems and, incidentally, coined the phrase “fiscal cliff.” The Congressional Budget Office (CBO) followed up with a full analysis, concluding that, if something is not done, restrictive automatic fiscal measures in 2013 could exceed $800 billion and force this economy into at least two quarters of decline. And though there is always room to cavil, surely the CBO's analysis and conclusions are reasonable. Severe problems are built into law on both the spending and on the revenue sides of the federal budget.

The biggest item is the expiration of the Bush tax cuts. There is, of course, much dispute on these. President Obama and the Democrats want to continue them for all but the wealthy, who they define as individuals who earn more than $200,000 a year and couples who earn more than $250,000 a year. Republicans want to extend them for all, regardless of income level. But if nothing is done, taxes will increase for all on January 2. Any relief on alternative minimum tax (AMT) also will disappear. Congress has not even voted this year's usual “patch” to prevent AMT from spreading from the present 4.4 million taxpayers affected by it to 32.9 million. Its impact then would hit with the spring tax session for 2012 taxes. Combined, these two matters, the end of the Bush tax breaks and AMT, would, according to the CBO, raise 2013 tax burdens by $265 billion.