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

Video Analysts: Beijing Parade a 'Bazaar' of Stolen Technology

Show commemorating victory over Japan in World War II involved long, medium and short range missiles, a range of tanks and 200 fighter aircraft More

Bernie Sanders Surge Reflects US Shift on Socialism

Although most analysts say it is unlikely he will get the Democratic nomination, Sanders' campaign opens up questions and issues that are otherwise marginalized More

Video On IS Frontline, Kurdish Fighters Ready for Offensive

Peshmerga soldiers say although they need more heavy artillery, they are poised to take the fight to the Islamic State extremists on their turf More

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.
Drowned Migrant Toddler Photo Triggers European Outragei
X
Henry Ridgwell
September 04, 2015 11:36 AM
The harrowing picture of a drowned three-year-old Syrian boy washed up on a Turkish beach appears to have galvanized Europe’s leaders into doing more to address the refugee crisis. France, Germany and Italy issued a joint call Thursday for compulsory quotas of refugees for all EU states. But there were chaotic scenes in Hungary as police tried to force migrants off a train heading for Austria. Henry Ridgwell has more. And a caution, some of the images in this report may be disturbing.
Video

Video Drowned Migrant Toddler Photo Triggers European Outrage

The harrowing picture of a drowned three-year-old Syrian boy washed up on a Turkish beach appears to have galvanized Europe’s leaders into doing more to address the refugee crisis. France, Germany and Italy issued a joint call Thursday for compulsory quotas of refugees for all EU states. But there were chaotic scenes in Hungary as police tried to force migrants off a train heading for Austria. Henry Ridgwell has more. And a caution, some of the images in this report may be disturbing.
Video

Video Russians Observe 11th Anniversary of Beslan School Attack

This week, Russians have been observing the 11th anniversary of the attack by Islamic militants on a school in Russia's North Caucasus region that killed more than 330 hostages, including 186 children. The three-day siege and massacre that started on September 1, 2004 took place in Beslan, a town in the republic of North Ossetia, and is one of the bloodiest terrorist acts ever in Russia. VOA's Mike Richman reports.
Video

Video Native Americans Debate: Father Serra, Saint or Sinner?

Pope Francis will canonize an 18th century missionary to Spanish California during a papal visit to the United States this month.  But some Native Americans have criticized the elevation to sainthood of the missionary priest, Junipero Serra. VOA's Mike O’Sullivan has more from Los Angeles.
Video

Video Calais School Offers Another Face of Europe’s Migrant Crisis

Europe is facing mounting criticism over how it’s handling its biggest migration crisis since World War II. But not all Europeans believe building walls or passing repressive policies are the answer. A school for migrants in the French port city of Calais, is opening doors and building bonds across nationalities. VOA's Lisa Bryant reports.
Video

Video Kurdish Fighters on IS Frontline Ready for Offensive

Finger on the trigger, the Kurdish Peshmerga soldier stared across the dust at a village taken over by Islamic State extremists. The Kurdistan’s Khazir frontline, just 45 minutes from the Islamic State stronghold of Mosul. And at this point, the militants were less than two kilometers away. VOA's Sharon Behn reports.
Video

Video China Announces Troop Cuts at WWII Parade

Chinese President Xi Jinping Thursday announced plans to cut the world’s largest military force by 300,000 troops. The announcement was made during a massive military parade to commemorate victory over Japan in World War II. The event was shunned by most Western leaders and for some is raising fresh concerns about China’s military ambitions. VOA’s Bill Ide has more from Beijing.
Video

Video Russia-Japan Relations Cool as Putin Visits China for WWII Anniversary

Russian President Vladimir Putin is in Beijing for commemorations of the 70th anniversary of China's WWII victory over Japan. Putin is expected to visit Japan later this year, but tensions between Tokyo and Moscow over islands disputed since the war, and sanctions over Ukraine, could pour cold water on the plan. VOA's Daniel Schearf reports.
Video

Video Yemen ‘on Brink of Disaster’ as Medical Shortages Soar

Aid agencies warn Yemen is on the brink of humanitarian disaster – with up to half a million children facing severe malnutrition, and hospitals running out of basic medicines. There are fears Yemen's civil war could escalate as the coalition led by Saudi Arabia tries to drive back Houthi rebels, who seized control of much of the country earlier this year. Henry Ridgwell reports.
Video

Video Apps Helping Kenyan Businesses Stay Ahead of Counterfeiters

Counterfeit goods in Kenya cost the government as much as $1 billion each year in lost tax revenues. The fake goods also hurt entrepreneurs who find it hard to carve out a niche in the market and retain customers. But as Lenny Ruvaga reports from Nairobi, information technology is being used to try to beat the problem.
Video

Video Nobel Prize Winner Malala Talks to VOA

Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video War, Drought Threaten Iraq's Marshlands

Iraq's southern wetlands are in crisis. These areas are the spawning ground for Gulf fisheries, a resting place for migrating wildfowl, and source of livelihood for fishermen and herders. Faith Lapidus has more.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Rebuilding New Orleans' Music Scene

Ten years after Hurricane Katrina inundated New Orleans, threatening to wash away its vibrant musical heritage along with its neighborhoods, the beat goes on. As Bronwyn Benito and Faith Lapidus report, a Musicians' Village is preserving the city's unique sound.
Video

Video In Russia, Auto Industry in Tailspin

Industry insiders say country relies too heavily on imports as inflation cuts too many consumers out of the market. Daniel Schearf has more from Moscow.
Video

Video Scientist Calls Use of Fetal Tissue in Medical Research Essential

An anti-abortion group responsible for secret recordings of workers at a women's health care organization claims the workers shown are offering baby parts for sale, a charge the organization strongly denies. While the selling of fetal tissue is against the law in the United States, abortion and the use of donated fetal tissue for medical research are both legal. VOA’s Julie Taboh reports.

VOA Blogs