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Ways around 'fiscal cliff,' experts say

| Saturday, Nov. 3, 2012, 9:19 p.m.

WASHINGTON — The Obama administration could blunt the economic harm caused by the “fiscal cliff” at the end of the year by using its unilateral powers over spending and taxes, for instance, by freezing how much in taxes is taken out of payroll checks, according to former senior officials and other tax and budget experts.

Beyond postponing tax increases, administration officials might also soften the blow from dramatic federal spending cuts by shifting available money toward paying immediate costs, such as government employee salaries, rather than saving for construction projects later in the year.

White House officials have yet to detail how they might handle the hundreds of billions of dollars in tax increases and spending cuts that are set to take effect if the administration and lawmakers fail to reach a deal on tackling the deficit.

When faced with a similar situation before, the administration considered delaying scheduled tax increases by deferring changes to income tax withholding tables, according to people familiar with the matter.

In 2010, when taxpayers were about to see a similar automatic increase in income taxes, top advisers to Treasury Secretary Timothy Geithner privately concluded that he probably had the power to put off changes to the tables under some circumstances, according to sources who spoke on the condition of anonymity.

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