The year in review

The year begins with the federal government hurtling toward the “fiscal cliff” of tax hikes and mandated budget cuts.

JANUARY

The year begins with the federal government hurtling toward the “fiscal cliff” of tax hikes and mandated budget cuts that would gouge a hole in the fragile economy. Rather than reaching the hoped-for “Grand Bargain” on taxes and spending, Republicans and Democrats strike a messy, short-term deal that raises revenue by closing loopholes in the tax code, while postponing the automatic budget cuts—called “the sequester”—for just two months. In his second inaugural address, President Obama makes an unapologetic case for progressive government, pledging action on immigration reform, climate change, and gay rights. Safety-net programs—including the health-care reforms now universally known as “Obamacare”—“do not make us a ‘nation of takers,’” says Obama, in reference to GOP rhetoric from the recent presidential campaign. “Preserving our individual freedoms ultimately requires collective action.” Republicans vow to fight him every step of the way.

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