The Fiscal Cliff and holiday spending

SPRINGFIELD, Mass. (WWLP) - As many families get ready for the holiday season, lawmakers in Washington D.C. are taking on a new challenge, Fiscal Cliff negotiations.

Come January, if Congress and President Obama can't reach an agreement, drastic spending cuts and tax hikes will kick in.

The direct impact of the Fiscal Cliff on us taxpayers will be an increase in income taxes.

Households earning $20,000 to $40,000 a year will see an increase of about $1,200. For households earning $40,000 to $60,000, that increase will be almost $2,000.

It's something many people say will take a direct hit on their wallets.

“I'm on a fixed income. All I'm saying is I got to live on what I get, and that's it,” said Robert Mendoza of Hampden.

Some people told 22News they are hopeful lawmakers will find a solution that will protect middle class and low income families.

“Things are going to stay focused. We are still going to move forward. Things are going to certainly get better for the middle class,” said Anne Cauley of East Longmeadow.

But even people who are optimistic said they are still shopping on a budget.

“Everybody knows in the family that things are really tight, and we kind of just do a little family thing and stay together. We don't go out and spend a lot,” said Charles Blake of Springfield.

“We are still at that point where we are not just ready to fee comfortable, you know go out and spend for Christmas type of thing. So it's a pretty strict budget that we are on,” said Cono D'elia of Watertown, Conn.

Some experts say, if we do cross the Fiscal Cliff, we could be facing yet another recession.