Costs of Falling Off The Fiscal Cliff

By Kelly McCarthy

December 29, 2012 Updated Dec 29, 2012 at 11:51 PM EDT

(WBNG Binghamton) The U.S. Government is running out of time to approve a deal that avoids going over the fiscal cliff.

If no deal is reached there is already speculation on how the tax hikes and budget cuts will affect our daily lives.

The last thing Tatiana Anderson wants to hear while getting her weekly groceries, is that falling off the fiscal cliff would mean higher prices in supermarkets.

"The prices are already ridiculous now for groceries, you know you have to feed a family of 4 you're talking $600-800 now for groceries a month just for the essentials," said Anderson from Endwell.

Expected federal budget cuts would limit FDA inspection services, meat prices in particular would see a big increase.

This would cause families to have changes of their own.

"Probably you know, eat different types of things that would probably cost a little bit less, or just shop around," said Anderson. "I think you're just going to have to compromise, give and take, probably eat more healthy and do away with the bad."

While the prices of many things are expected to rise, some analysts say there will be a silver lining, they're expecting to see lower prices at the pump.

"Making the assumption if we do go over the fiscal cliff then business will slow down, consumers will consume less, so we're going to make the assumption that there will be less demand for gasoline," said Joe Mirabito, CEO of Mirabito Holdings, Inc.

Prices at the pump all boil down to supply and demand.

Add that to cheaper crude oil prices that AAA is reporting, and people could see gas prices closer to $2.00 a gallon.

"Any gasoline retailer welcomes the prices going down," said Mirabito.

"Gas prices have been really high, and anything that could help us out at the pump would be greatly appreciated," said Jim Fuller of Vestal.

But hold the celebrations.

The additional tax hikes wouldn't keep prices down for long.

"When you buy a gallon of gasoline close to 70 cents a gallon is tax, and if you buy diesel, close to 75 cents a gallon is tax, my worry, as we fall off this cliff, is that government officials decide those numbers need to increase," said Mirabito.

A lot of things to think about as the nation sits on the edge of the fiscal cliff.