News / USA

    US Could Step Off 'Fiscal Cliff' in Days

    Speaker of the House John Boehner, R-Ohio, speaks to reporters about the fiscal cliff negotiations at the Capitol in Washington, Dec. 21, 2012.
    Speaker of the House John Boehner, R-Ohio, speaks to reporters about the fiscal cliff negotiations at the Capitol in Washington, Dec. 21, 2012.
    Michael Bowman
    Less than a week remains before a still-recovering U.S. economy confronts a draconian austerity regime of automatic, across-the-board tax increases and deep cuts to federal spending.  Hopes of averting the so-called “fiscal cliff” by January 1 are dimming with each passing day.

    Call it Washington’s version of "Mission Impossible".


    What is the U.S. Fiscal Cliff?

    • An agreement intended to force politicians to compromise and make deals.
    • Without a deal by January 1, 2013, sharp spending cuts would hit military and social programs.
    • Tax hikes also would go into effect.
    • The combination would reduce economic activity, and could boost unemployment and push the nation back into recession.
    The challenge?  A politically-divided and chronically-gridlocked Congress has just days to forge a deficit reduction package acceptable to legislators of both parties and President Barack Obama.  The package would have to pass both houses of Congress and be signed into law by midnight New Year’s Eve, or the United States will, indeed, step off the fiscal cliff.

    In other words, Washington must accomplish in a few days what years of intensive negotiations have failed to produce: a blueprint for stabilizing America’s runaway national debt, which stands at $16 trillion and is projected to top $20 trillion in a few years.

    “I do not want us to go over the cliff.  I want to find a solution," said Republican Senator John Barrasso on Fox News Sunday.

    His words were echoed by Democratic Senator Amy Klobuchar on ABC’s This Week program.

    “It is time to get back to the [negotiating] table,” she said.

    For more than a month, negotiations were led by President Obama, a Democrat, and Republican House Speaker John Boehner.  Now, Boehner has all but removed himself from the talks.  After failing to narrow differences with Obama, Boehner last week sought to pass legislation on his own that would save all but millionaires from a federal tax increase.  But ultra-conservative Republicans refused to back the measure, and Boehner canceled the vote and adjourned the House until further notice.  Boehner said the burden of forging a deal now falls to President Obama and Senate leaders.

    The Senate convenes Thursday and presumably will stand ready to vote on any deal that may materialize.  Some Senate Republicans, like Lindsey Graham, say they would be willing to vote for higher taxes on top earners, as Democrats demand.

    “I would vote for revenues, including tax rate hikes, even though I do not like them, to save the country from becoming [like] Greece,” he said.

    Graham spoke on NBC’s Meet the Press program.  Meanwhile, some Democratic Senators, like Amy Klobuchar, advocate a large-scale deal that addresses taxes as well as federal spending, including reforms to costly programs that provide health care and other benefits to retirees.

    “I would love to see a bigger deal.  I would like nothing more, and there are always miracles," she said. "It is Christmas.”

    Before heading to Hawaii for a Christmas vacation, President Obama suggested a scaled-back package of tax relief for America’s middle class may be the only remaining viable option ahead of the fiscal cliff.

    “There is absolutely no reason, none, not to protect these Americans from a tax hike,” he said.

    Some political analysts believe lawmakers will find the political will to compromise only after January 1, when they will face the wrath of constituents angry over higher taxes and lower take-home pay combined with reduced government services brought on by federal spending cuts.  In the meantime, financial markets could be thrown into turmoil, consumers may limit spending, and businesses may scale back operations in anticipation of austerity measures, putting the nation’s fragile economic recovery at risk.

    You May Like

    Former US Envoys Urge Obama to Delay Troop Cuts in Afghanistan

    Keeping troop levels up during conflict with both Taliban and Islamic State is necessary to support Kabul government, they say

    First Lady to Visit Africa to Promote Girls' Education

    Michele Obama will be joined by daughters and actresses Meryl Streep and Freida Pinto

    Video NYSE Analyst: Brexit Will Continue to Place Pressure on Markets

    Despite orderly pricing and execution strategy at the New York Stock Exchange, analyst explains added pressure on world financial markets is likely

    This forum has been closed.
    Comment Sorting
    Comments
         
    by: Lumineer from: CA
    December 26, 2012 1:48 PM
    The best way to resolve fiscal problems in a longer view is to retreat from WTO. The same condition likes EU. Those countries need disassociate from WTO, because the evidence proves their products lack competitive ability, they lost their markets one by one.
    In Response

    by: Michael Guy from: Canonsburg, Pa
    December 26, 2012 11:32 PM
    We have heard of the phrase "Brink of Insanity". But the fiscal Cliff is actually the "Brink of Sanity". If any one of us find our selves in too much debt, the sane and correct response is to increase revenue and decrease expenses. Finally, the profligate squanderers in Washington and their cadres of parasites have come to realize their is no cornucopia, there is no free lunch. Loans are made by creditors with terms, conditions and pledges of physical assets as collateral that benefit the foreign plutocratic lenders. Time to quit promising lenders and voters everything, time to show fiduciary and fiscal cometence, time to let reality, ie the fiscal cliff, come to fruition. Only in Washington and Lewis Carrol's looking glass world would fiscal competence be called a catastrophe.

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Brexit Vote Plunges Global Markets Into Uncharted Territoryi
    X
    June 24, 2016 9:38 PM
    British voters plunged global markets into unknown territory after they voted Thursday to leave the European Union. The results of the Brexit vote, the term coined to describe the referendum, caught many off guard. Analysts say the resulting volatility could last for weeks, perhaps longer. Mil Arcega reports.
    Video

    Video Brexit Vote Plunges Global Markets Into Uncharted Territory

    British voters plunged global markets into unknown territory after they voted Thursday to leave the European Union. The results of the Brexit vote, the term coined to describe the referendum, caught many off guard. Analysts say the resulting volatility could last for weeks, perhaps longer. Mil Arcega reports.
    Video

    Video Orlando Shooting Changes Debate on Gun Control

    It’s been nearly two weeks since the largest mass shooting ever in the United States. Despite public calls for tighter gun control laws, Congress is at an impasse. Democratic lawmakers resorted to a 1960s civil rights tactic to portray their frustration. VOA’s Carolyn Presutti explains how the Orlando, Florida shooting is changing the debate.
    Video

    Video Tunisian Fishing Town Searches for Jobs, Local Development Solutions

    As the European Union tries to come to grips with its migrant crisis, some newcomers are leaving voluntarily. But those returning to their home countries face an uncertain future.  Five years after Tunisia's revolution, the tiny North African country is struggling with unrest, soaring unemployment and plummeting growth. From the southern Tunisian fishing town of Zarzis, Lisa Bryant takes a look for VOA at a search for local solutions.
    Video

    Video 'American Troops' in Russia Despite Tensions

    Historic battle re-enactment is a niche hobby with a fair number of adherents in Russia where past military victories are played-up by the Kremlin as a show of national strength. But, one group of World War II re-enactors in Moscow has the rare distinction of choosing to play western ally troops. VOA's Daniel Schearf explains.
    Video

    Video Experts: Very Few Killed in US Gun Violence Are Victims of Mass Shootings

    The deadly shooting at a Florida nightclub has reignited the debate in the U.S. over gun control. Although Congress doesn't provide government health agencies funds to study gun violence, public health experts say private research has helped them learn some things about the issue. VOA's Carol Pearson reports.
    Video

    Video Trump Unleashes Broadside Against Clinton to Try to Ease GOP Doubts

    Recent public opinion polls show Republican Donald Trump slipping behind Democrat Hillary Clinton in the presidential election matchup for November. Trump trails her both in fundraising and campaign organization, but he's intensifying his attacks on the former secretary of state. VOA National Correspondent Jim Malone reports.
    Video

    Video Muslim American Mayor Calls for Tolerance

    Syrian-born Mohamed Khairullah describes himself as "an American mayor who happens to be Muslim." As the three-term mayor of Prospect Park, New Jersey, he believes his town of 6,000 is an example of how ethnicity and religious beliefs should not determine a community's leadership. Ramon Taylor has this report from Prospect Park.
    Video

    Video Internal Rifts Over Syria Policy Could Be Headache for Next US President

    With the Obama administration showing little outward enthusiasm for adopting a more robust Syria policy, there is a strong likelihood that the internal discontent expressed by State Department employees will roll over to the next administration. VOA State Department correspondent Pam Dockins reports.
    Video

    Video Senegal to Park Colorful ‘Cars Rapide’ Permanently

    Brightly painted cars rapide are a hallmark of Dakar, offering residents a cheap way to get around the capital city since 1976. But the privately owned minibuses are scheduled to be parked for good in late 2018, as Ricci Shryock reports for VOA.
    Video

    Video Florida Gets $1 Million in Emergency Government Funding for Orlando

    The U.S. government has granted $1 million in emergency funding to the state of Florida to cover the costs linked to the June 12 massacre in Orlando. U.S. Attorney General Loretta Lynch announced the grant Tuesday in Orlando, where she met with survivors of the shooting attack that killed 49 people. Zlatica Hoke reports.
    Video

    Video How to Print Impossible Shapes with Metal

    3-D printing with metals is rapidly becoming more advanced. As printers become more affordable, the industry is partnering with universities to refine processes for manufacturing previously impossible things. A new 3-D printing lab aims to bring the new technology closer to everyday use. VOA's George Putic reports.
    Video

    Video Big Somali Community in Minnesota Observes Muslim Religious Feast

    Ramadan is widely observed in the north central US state of Minnesota, which a large Muslim community calls home. VOA Somali service reporter Mohmud Masadde files this report from Minneapolis, the state's biggest city.

    Special Report

    Adrift The Invisible African Diaspora