NRF CEO discusses ripple effect of fast approaching fiscal cliff

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A government shutdown looms; the national debt continues to skyrocket; and Taxmaggedon is on the horizon. Sound familiar?

Last week, the Senate Finance Committee agreed on a bi-partisan pact to extend a slew of expiring or expired tax breaks, and Congressional leaders settled on a tentative deal to keep the government operating until March 2013. But this pact is also a temporary stop-gap for a series of contradictory tax and spending policies that will automatically take effect next year. The result: Close to $500 billion in tax hikes that could seriously hurt economic growth.

Election-year politics have mired Congress in a political gridlock on both fronts. Each side of the aisle agrees they want to avoid the fiscal cliff, but continue to debate on the right policies to get there. Recognizing the effect this would have across all facets of the economy, NRF members and staff have been meeting with lawmakers to urge that action take place sooner rather than later.

NRF’s latest research shows consumers are keeping a close eye on the economy before they shop. A whopping 85% of Americans said the economy will impact their back-to-school and back-to-college shopping. As the second largest consumer holiday of the year, a very important question surfaces: How will this fiscal uncertainty impact spending throughout the rest of the year, including the holiday season?

Following an interview on Bloomberg’s In the Loop with Betty Liu earlier this week, NRF President and CEO Mathew Shay visited CNBC’s Closing Bell with Maria Bartiromo to discuss the industry’s concerns about this looming crisis, the impact on retailers moving forward, and the effect of this uncertainty on consumer confidence, and ultimately, the economy. Watch Shay’s commentary below.

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