WHAT IS THE `FISCAL CLIFF': A package of tax increases and spending cuts that takes effect in January unless Congress passes a budget deal by then.

WHO IS AFFECTED: Everyone who pays income tax - and some who don't -will feel it. Middle-income families would have to pay an average of about $2,000 more next year, the nonpartisan Tax Policy Center has calculated.

HIT TO GROWTH: Up to 3.4 million jobs would be lost, the Congressional Budget Office estimates. The unemployment rate would rise to 9.1 percent. The economy would likely fall into recession next year, the CBO says.