(KCEN) -- Congress is quickly running out of time to reach a compromise that avoids the looming fiscal cliff.
If they don't, the new year will ring in massive tax increases and budget cuts impacting nearly every American.
In addition to spending reductions, roughly 500 billion dollars in tax cuts would expire without a deal.
According to the Tax Policy Center someone making 40 to 65 thousand dollars a year would pay about $672 more in payroll taxes and more than $1,300 in federal income taxes per year.
The child tax credit would be cut in half and credit for college students would be reduced also.
Federal Reserve Chairman Ben Bernanke said, "A fiscal shock of that size would send the economy toppling back into recession."
Economists say uncertainty over the fiscal cliff is already hurting the economy as businesses hold off new investments and hiring until they know what the new year holds.