On January Congress passed the American Taxpayer Relief Act. The next day, President Obama signed the bill into law. This averted the fiscal cliff by delaying sequestration for two months, and preventing automatic tax increases that were scheduled to commence after the New Year.
Although the Act provided a short term fix, it failed to address the looming debt ceiling. The ceiling could bring government to a standstill in late February, or when the national debt reaches $16.4 trillion if additional action isn’t taken.
Boston firms remain cautious in anticipation of announcements. Those most concerned are in defense, defense-related industries, or are reliant on NIH funding. State and municipalities are already implementing self-imposed austerity measures in anticipation of cuts.
Boston is in a relatively healthy position to weather the impacts given the pace of our post-recession recovery. Full effects remain to be seen.