Congress is back this week to begin their “lame duck” session. At the top of lawmakers’ to do list is the fiscal cliff. Here are the five things you need to know about the debate:

1.    What Is The Fiscal Cliff? Two major events comprise the fiscal cliff: the expiration of the 2001, 2003, and 2010 tax cuts and the  sequester spending cuts resulting from the Budget Control Act of 2011.

2.    What Do Both Sides Want? In short, Republicans want fewer cuts to defense spending while Democrats want fewer cuts to domestic programs and higher taxes on high-earning Americans. President Obama has said he will veto any plan that does not increase taxes while Sen. Patty Murray (D-Wash.), who is likely to take over the Senate Budget Committee in January, recently said her party would be willing to let the U.S. go off the fiscal cliff without these increases.

3.    How Likely Is Congress To Reach A Solution? That depends on who you ask. Wethink it is most likely Congress will do what it does best – delay real reform in favor of a short-term solution. Here is what Citigroup political analyst Tina Fordham predicted would happen if election 2012 resulted in no turnover in the White House or Congress: “We expect another piecemeal, short-term fiscal deal that temporarily resolves the fiscal cliff problem. … Our basic thesis on the fiscal cliff has been simple: If you have the same players and the same situation, you should expect the same outcomes. … A continuation of the status quo suggests a continuation of the status quo: more late-stage deal-cutting.”

4.    What Would Happen To The Economy If Congress Does Nothing? Most analysts, including the Congressional Budget Office (CBO), believe the U.S. economy would fall into a recession. The CBO thinks the unemployment rate would increase more than one percentage point and growth would slow enough to put the U.S. economy in recessionary territory for a year or two. The largest impact, at least according to economists surveyed by The Hill, would come from the expiring tax cuts. Last month The Hill wrote, “Economists appear to be in broad agreement that the possibility of ending the George W. Bush-era tax levels next year would have about twice the impact on economic growth as the automatic cuts to government spending under the sequester.”

5.    How Many Americans Would Be Affected By The Cliff? Nearly every American would be impacted, especially if the tax cuts expire. The 2001 and 2003 tax reduced income tax rates for every American that pays income taxes. The 2010 payroll tax cut reduced payroll taxes for all U.S. workers – even those who owe no income taxes. Middle income taxpayers could face tax increases up to $2,000 if Congress flies off the fiscal cliff.