Wall St to lobby against "fiscal cliff" When the US came within hours of defaulting on its debt last year, many Wall Street executives were angry at Congress for nearly inflicting a devastating - and avoidable - wound on the US economy. Now that the US is facing the possibility of another budgetary showdown with potentially even higher stakes - the so-called "fiscal cliff" at the end of this year - Wall Street lobbyists are preparing an aggressive campaign to stop the political brinksmanship. "The experience of last year taught everybody to be ... focused on it earlier and not assume that this is business as usual," said one bank lobbyist based in Washington. People who had relied on government to respond eventually were surprised when it didn't. If Congress fails to pass new legislation by December 31, it would trigger a fiscal tightening of $600bn in 2013 in the world's largest economy, probably tipping it into recession in the first half of the year. The drag would come mainly from the expiration of more than $300bn Bush-era tax rates, as well as the impact of $100bn in automatic spending cuts to domestic and defence spending. Other tax breaks would also expire, including a payroll tax cut worth $120bn. Soon after, in early 2013, the US is expected to hit its borrowing limit again, which could worsen the picture by adding the spectre of default and a financial crisis. "I think that the level of concern is high, has remained high, and will remain high until a deal is reached," says Scott Talbott, senior vice-president for government affairs at the Financial Services Roundtable. Different business sectors are preparing for the looming fiscal cliff with varying degrees of urgency. Among the most aggressive in pushing for a deal are defence contractors who would bear the brunt of the planned cuts to the Pentagon budget. Medical providers would also be hit hard by the automatic cuts. Companies that pay large dividends - such as utilities - would be slammed if the tax rate on dividends rise as scheduled from 15 per cent to more than 40 per cent. But financial services companies also have a huge amount at stake. The question is how to influence the political process that remains gridlocked ahead of the November election . Some US lawmakers - particularly in the Senate - have begun to hold meetings in an effort to forge a deal, but these discussions are not likely to yield much progress until after the poll. The bank lobbyist says the industry still lacks an "organised effort" to prevent the worst-case scenario. "It's really inconvenient to be doing this during an election," he says. The only thing that could overwhelm that difficulty is the gravity of the situation, and I don't see that pre-election. For Wall Street in particular, there is also a dilemma in terms of how vocal they want to be on the issue, given the unpopularity of the large banks in the wake of the financial crisis. "If you're going to build a fiscal cliff coalition, I'm not sure you want the banks to be the face to get something done," says Chris Krueger of Guggenheim Partners. "You want Warren Buffett, or Jeff Immelt, or the railroads," he says. Then there are tactical considerations. Though one bank lobbyist partly blamed a faction of congressional Republicans for last August's debt ceiling showdown, saying they were "willing to go off the cliff with all flags flying," it is unclear whether it is in Wall Street's interest to take on some of their traditional allies on Capitol Hill by pushing them to accept higher revenues or tax increases in any deficit reduction deal, as Democrats are demanding. But as the deadline looms closer, there is bound to be less complacency. "The fact that the debt limit was such a nasty fight last time has lost a lot of credibility for the notion that Congress will just figure things out," says Sean West, an analyst at Eurasia Group.