The "Fiscal Cliff" refers to a situation in the United States where a series of tax increases and spending cuts were set to take effect at the end of 2012. This combination was expected to significantly reduce the federal budget deficit but could also lead to a recession if not addressed. The term gained prominence as lawmakers debated how to avoid these automatic changes. To prevent the negative economic impact of the Fiscal Cliff, Congress and the President had to negotiate a compromise. This involved extending certain tax cuts and delaying some spending cuts, allowing for a more gradual approach to fiscal responsibility while aiming to stimulate economic growth.