Witnesses testified on the effects of the “fiscal cliff” on the U.S. economy and the middle class, with a focus on sustaining long-term economic growth, reducing U.S. debt, and protecting the middle class. They agreed that the issue need to be resolved immediately to avoid another recession, but disagreed on how to raise revenue to achieve fiscal sustainability.
“Fiscal cliff” referred to the impending tax increases and sequestration budget cuts at the end of 2012 if Congress failed to reach a new budget agreement. "Sequestration," a legal procedure in which automatic budget cuts are triggered, was agreed to in the Budget Control Act of 2011.