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Full steam ahead? How economy might look if 'cliff' deal is struck. (+video)

If Washington can strike a bargain on the 'fiscal cliff,' some tax hikes and spending cuts would slow the economy. But rising consumer confidence could keep the slow recovery chugging along.

House speaker Boehner to push for 'cliff' vote on his Plan B
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Consider this a sign of hope: As the clock ticks toward Dec. 31 with no fiscal deal in place, the stock market is holding up pretty well.

Investors expect Congress and the White House will find a way to keep the economy from plunging headlong over that much-discussed "cliff" of tax hikes and automatic federal spending cuts at the end of the year.

Getting to congressional "yes" votes within the next 11 days isn't a sure thing, and stock prices could start struggling if the prospects for a deal come into doubt. The fact that the Republican House speaker has been pushing a "Plan B," and Democrats say they'll only consider a "Plan A," is hardly reassuring.


But for now, financial analysts and the markets appear focused squarely on a 2013 environment in which the fiscal cliff is avoided, and the economy stays out of recession.

What would that economy look like?

It would be one with scaled-back federal largess, but possibly enhanced consumer confidence.


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