CHARLOTTE – President Barack Obama's re-election is already having an impact on the economy. Stocks tumbled Wednesday as investors reacted to concerns about looming financial issues.
The so-called "fiscal cliff," which is now just weeks away, is at the top of that economic priority list.
Before his first four years are officially up, Obama must confront a massive economic challenge – $600 billion in steep tax hikes and automatic spending cuts that take effect Jan. 1.
"In the coming weeks and months, I am looking forward to reaching out to leaders of both parties to meet the challenges we can only solve together," Obama said during his victory speech Tuesday night.
The "fiscal cliff" was supposed to be an incentive for Congress to pass a budget deal but now it's causing plenty of angst for business owners and economists.
"This is the wrong time for massive spending cuts and massive tax increases to come in, in such an untargeted and nonstrategic way," Duke business professor Aaron Chatterji said.
For months, business leaders said the election created too much uncertainty – companies wouldn't hire and wouldn't spend money. Experts say Tuesday's decision should help.
"In those ways, you're actually seeing a reduction in the policy uncertainty and hopefully a positive impact on businesses as they seek to make those decisions," said Chatterji.
But not solving the "fiscal cliff" problem could plunge the country into another recession.
"In my view, it is incredibly important for them to get together at least to come up with a temporary framework to work together," Chatterji said.
Lawmakers say the best thing Congress can do is implement a temporary fix, pushing a real solution off until late 2013.
"Lame-duck congresses aren't known for doing big things, and frankly lame-duck congresses probably shouldn't do big things," said House Speaker John Boehner. "So I think the best you can hope for is some kind of bridge."
Until that bridge is built, economists say businesses will hold onto their cash and hold off on hiring.
Some financial planners have told clients to expect a volatile stock market until Congress addresses the "fiscal cliff."
Lawmakers also need to vote on an extension of the debt limit by February. That, too, could lead to economic uncertainty.