Fiscal cliff is a term used to describe the U.S. economic situation in which a series of tax relief laws, if unchanged, will expire at midnight on December 31, 2012, resulting in tax increases for the average worker and spending cuts for government programmes mandated by the Budget Control Act of 2011 to control federal budget deficits.

These laws include tax increases due to the expiration of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. At the same time, spending cuts agreed upon as part of the debt ceiling legislation of 2011 would go into effect affecting programmes such as the defence budget and Medicare with deep, automatic cuts.