The failure of the deficit reduction supercommittee to reach an agreement in November 2011 automatically triggered $1.2 trillion in broad-based spending cuts over a multiyear period beginning in 2013 (the official term for this is “automatic sequestration”). The automatic cuts will be split evenly between defense spending and nondefense spending. In addition, a number of significant tax breaks expire at the end of 2012.

The expected economic impact of the combination of mandatory spending cuts and tax increases has been deemed by many the “fiscal cliff.”

Significant tax provisions expire at the end of 2012.