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.
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

US Imposes Sanctions on Alleged Honduran Drug Gang

Treasury department alleges Los Valles group is responsible for smuggling tens of thousands of kilograms of cocaine into US each month More

At 91, Marvel Creator Stan Lee Continues to Expand his Universe

Company's chief emeritus hopes to interest new generation of children in superheroes of all shapes and sizes by publishing content across multiple media platforms More

Photogallery New Drug Protects Against Virus in Ebola Family

Study by researchers at University of Texas Medical Branch, Tekmira Pharmaceuticals is first looking at drug's effectiveness after onset of symptoms 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.
Five Patients Given Experimental Ebola Drug Said to Be Improvingi
X
Carol Pearson
August 19, 2014 11:43 PM
The World Health Organization has approved the use of experimental treatments for Ebola patients in West Africa. The Ebola outbreak there is unprecedented, the disease deadly. The number of people who have died from Ebola has surpassed 1,200. VOA's Carol Pearson reports on the ethical considerations of allowing experimental drugs to be used.
Video

Video Five Patients Given Experimental Ebola Drug Said to Be Improving

The World Health Organization has approved the use of experimental treatments for Ebola patients in West Africa. The Ebola outbreak there is unprecedented, the disease deadly. The number of people who have died from Ebola has surpassed 1,200. VOA's Carol Pearson reports on the ethical considerations of allowing experimental drugs to be used.
Video

Video In Ukraine, Fear and Distrust Remain Where Fighting has Stopped

As the Ukrainian military reclaims control of eastern cities from pro-Russian separatists, residents are getting a chance to rebuild their lives. VOA's Gabe Joselow reports from the town of Kramatorsk in Donetsk province, where a sense of fear is still in the air, and distrust of the government in Kyiv still runs deep.
Video

Video China Targets Overseas Assets of Corrupt Officials

As China presses forward with its anti-graft effort, authorities are targeting corrupt officials who have sent family members and assets overseas. The efforts have stirred up a debate at home on exactly how many officials take that route and how likely it is they will be caught. Rebecca Valli has this report.
Video

Video Leading The Fight Against Islamic State, Kurds Question Iraqi Future

Western countries including the United States have begun arming the Kurdish Peshmerga forces in northern Iraq to aid their battle against extremist Sunni militants from the Islamic State. But there are concerns that a heavily-armed Kurdistan Regional Government, or KRG, might seek to declare independence and cause the break-up of the Iraqi state. As Henry Ridgwell reports from London, the KRG says it will only seek greater autonomy from Baghdad.
Video

Video In Rural Kenya, Pressure Builds Against Female Circumcision

In some Kenyan communities, female genital mutilation remains a rite of passage. But activists are pushing back, with education for girls and with threats of punishment those who perform the circumcision. Mohammed Yusuf looks at the practice in the rural eastern community of Tharaka-Nithi.
Video

Video For Obama, Racial Violence is Personal Issue

The racial violence in the St. Louis suburb of Ferguson is presenting U.S. President Barack Obama with an issue to which he has a deep personal connection. To many Americans, Obama's election as America's first black president marked a turning point in race relations in the United States, and Obama has made ending the violence a policy priority. On Monday he issued a new call for calm and understanding. Luis Ramirez reports from the White House.
Video

Video Clinton-Obama Relationship Could Impact 2016 Election

President Barack Obama and former Secretary of State Hillary Clinton have a long and complicated relationship. That relationship took another turn recently when Clinton criticized the president’s foreign policy. VOA National Correspondent Jim Malone reports there is renewed attention on the Clinton-Obama relationship as Hillary Clinton considers running for
Video

Video Iran Looks to Maintain Influence in Baghdad With New Shia PM

Washington and Tehran share the goal of stopping Syrian-based militants in Iraq. But experts say it's Iran, not the United States, that will most influence how the new government in Baghdad approaches internal reforms and the war in Syria. VOA State Department Correspondent Scott Stearns has the story.

AppleAndroid