News / USA

Obama, Congress Face 'Fiscal Cliff'

U.S. President Barack Obama waves to reporters as he and his family return to the White House in Washington, November 7, 2012.
U.S. President Barack Obama waves to reporters as he and his family return to the White House in Washington, November 7, 2012.
TEXT SIZE - +
VOA News
Newly re-elected U.S. President Barack Obama and his political opponents in Congress are facing an end-of-the-year deadline to reach a deal on taxes and spending cuts that has proved both contentious and elusive for the last two years.

As it stands, $600 billion in spending cuts for key defense and domestic programs are set to take effect January 1, and tax cuts affecting all American workers would expire, with the government then taking more money out of their paychecks.

The country's presidential and congressional elections were held this week. Now Obama, the incumbent who won a new four-year term, and his Democratic allies in the Senate are set to negotiate with the Republican-controlled House of Representatives to see if they can reach a pact to avoid cascading over what Washington is calling a "fiscal cliff."

The independent Congressional Budget Office on Thursday laid out the importance of reaching a deal.

It said that failure to reach an agreement would be dire for the fragile U.S. economy, the world's largest. The financial analysts said that if no deal is reached by year's end, the country's already-sluggish economy would contract by five-tenths of a percent in 2013, and that the jobless rate would jump from 7.9 percent last month to 9.1 percent by the end of next year.

But reaching a deal will not be easy, with Obama calling for the end to tax cuts for households earning more than $250,000 a year and Republicans adamantly against raising tax rates.  The Republican House leader, John Boehner, says that Republicans would be open to some form of increasing government revenues, possibly through elimination of various tax deductions, as long as Democrats agree to reform spending for government pension and health care programs for the elderly.

President Obama and Boehner came close to reaching a long-term deal debt and spending deal in 2011, but it fell apart, leading to the pact calling for the mandated spending cuts and the tax changes that would take effect in January.

Neither the president nor his political opponents want the mandates to take effect, but put the possibility of them in place as a way to force an agreement by a certain deadline.

As the cumulative U.S. government debt total continues to mount, Obama and the lawmakers will also face a decision early in 2013 on whether to increase the amount the country can borrow beyond the current $16 trillion level.  Obama has pledged to work for a plan that would reduce the debt level over a period of years, but also has been unable to reach an agreement on that issue with his Republican opponents.

Some information for this report was provided by AP, AFP and Reuters.

You May Like

Multimedia Anti-Keystone XL Protests Continue

Demonstrators are worried about pipeline's effect on climate change, their traditional way of life, health and safety More

Thailand's Political Power Struggle Continues

Court gave Prime Minister Yingluck Shinawatra until May 2 to prepare her defense over abuse of power charges but uncertainty remains over election timing More

Malaysia Plane Search Tests Limits of Ocean Mapping Technology

Expert tells VOA existing equipment’s maximum operating depth is around 6 kilometers as operation continues on ocean bed for any trace of MH370 More

This forum has been closed.
Comment Sorting
Comments
     
by: Observer from: Southeastasia
November 14, 2012 10:33 AM
Studying the profiles of the people who voted for Obama strongly indicates that Obama might have to step down from his presidency in the midst of the term. Social, financial, security, political problems will multiply to such an extent beyond his ability to handle that his health will be seriously afected; he may lose so much sleep and develop a serious mental problem to the extent that he will be no longer fit to lead the "Divided" States of America. He has become a "trojan horse" to the US. His talk is cheap. Listen to the lyrics of the song "Silence is golden". This song will become top song again during his failed presidency.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Pet Kangaroo Helps Spread Environmental Messagei
X
Penelope Poulou
April 22, 2014 5:53 PM
Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pet Kangaroo Helps Spread Environmental Message

Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pro-Russian Separatists Plan 'Federalization Referendum' in Eastern Ukraine

Pro-Russian separatists in eastern Ukraine say they plan to move forward next month with a referendum vote for greater autonomy, despite the Geneva agreement reached with Russia, the U.S. and Ukraine to end the political conflict. VOA's Brian Padden reports from the city of Donetsk in Eastern Ukraine.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video International Students Learn Film Production in World's Movie Capital

Hollywood - which is part of Los Angeles - is the movie capital of the world, and many aspiring filmmakers go there in hopes of breaking into the movie business. Mike O'Sullivan reports that regional universities are also a magnet for students who hope to become producers or directors.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid