Would fiscal cliff deal affect economic recovery?

(CBS News) The fiscal cliff was one of the issues behind Wednesday's Wall Street sell-off. The Dow Jones Industrials lost 313 points -- its worst day of the year. The index fell below the 13,000 mark for the first time in two months.

And the clock is ticking as investors look ahead to what a possible package of tax increases and spending cuts could mean to the economic recovery.

Mark Zandi, chief economist at Moody's Analytics, said, "If you tote up all of the things that will happen on January 1st -- all the tax increases, all the spending cuts, everything -- it actually totes up to $728 billion in calendar year 2013."

The numbers are staggering. According to the Congressional Budget Office, the average American family will pay between $2,000 and $3,000 in additional taxes, 1,200 government programs will see cuts, and unemployment is expected to climb back above nine percent.

Zandi said, "It's very, very likely that we suffer a very deep recession, and I don't think that's the way we want to go here."

The fiscal cliff is as much about politics as it is about economics. Sen. Chris Coons, D-Del., said, "As a member of the Budget Committee, I have worked with and met with other senators, Democrats and Republicans, to try and figure out some path forward. But bluntly, our challenge is leadership."

Coons has been working on the issue for more than a year. Asked how anything could be different after an election that has maintained many of the same players, Coons said, "That's exactly the core question, is why should the markets believe, why should families believe -- because we have to. Because we don't have a choice."

The alternative means more turbulence.

Zandi said, "Until investors and business people can construct a clear narrative with respect to how President Obama and the House Republicans are going to nail this thing down, there's going to be a lot of uncertainty, a lot of fear, and we're not going anywhere. "

So what does a final deal on the fiscal cliff look like?

Coons said, "I am sure it is going to be messier and harder than I would like. That is the nature of a real compromise is that everybody ends up unhappy."

For more on the high stakes of the fiscal cliff, watch Rebecca Jarvis' full report in the video above.