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

Israelis Quietly Expand Enclave in Palestinian District of Jerusalem

Estimated 500 settlers, armed or protected by paramilitary police, live in Silwan among 50,000 Palestinians More

Video US, Iran Face Similar Challenges in Syrian Fight Against IS

Both Washington, Tehran back fighters battling Islamic State militants in Iraq -- but in Syria they support opposing sides in country’s civil war More

China Boosts Efforts to Help Afghan, Regional Stability

Observers say China’s increased regional involvement are due to concerns that Afghan instability and the presence of anti-China militants in Pakistani border areas could fuel Xinjiang troubles 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.
China Political Meeting Seeks to Improve Rule of Lawi
X
William Ide
October 20, 2014 10:23 AM
China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.
Video

Video Latinas Converting to Islam for Identity, Structure

Latinos are one of the fastest growing groups in the Muslim religion. According to the Pew Research Center, about 6 percent of American Muslims are Latino. And a little more than half of new converts are female. VOA’s Carolyn Presutti travelled to Miami, Florida -- where two out of every three residents is Hispanic -- to learn more.
Video

Video Nigeria Agrees to Cease-Fire With Boko Haram

Islamist militant group Boko Haram and the Nigerian government have agreed to a cease-fire. The Nigerian government issued an order Friday, telling all military chiefs "to comply with the cease-fire agreement in all theaters of operations. Why now and the significance of the agreement are questions on some people’s minds. VOA's Mariama Diallo reports.
Video

Video Kobani Fighting Sends 400,000 Refugees to Turkey

The offensive by Islamic State militants against the northern Syrian city of Kobani has caused hundreds of thousands of residents to flee to Turkey. They receive help from Turkish authorities and individuals, but say much more is needed. VOA’s Scott Bobb reports from the town of Suruc a few kilometers from the border.
Video

Video Exclusive: American Joins Kurds' Anti-IS Fight

The United States and other Western nations have expressed alarm about their citizens joining Islamic State forces in Syria and Iraq. In a rare counterpoint to the phenomenon, an American has taken up arms with the militants' Syrian Kurdish opponents. Elizabeth Arrott has more in this exclusive profile by VOA Kurdish reporter Zana Omer in Ras al Ayn, Syria.
Video

Video South Korea Confronts Violence Within Military Ranks

Every able-bodied South Korean male between 18 and 35 must serve for 21 to 36 months in the country’s armed forces, depending upon the specific branch. For many, service is a rite of passage to manhood. But there are growing concerns that bullying and violence come along with the tradition. Reporter Jason Strother has more from Seoul.
Video

Video Comanche People Maintain Pride in Their Heritage

The Comanche (Indian nation) once were called the “Lords of the Plains,” with an empire that included half the land area of current day Texas, large parts of Oklahoma, New Mexico, Kansas and Colorado.The fierceness and battle prowess of these warriors on horseback delayed the settlement of most of West Texas for four decades. VOA’s Greg Flakus reports from Lawton, Oklahoma, that while their warrior days are over, the 15,000 members of the Comanche Nation remain a proud people.
Video

Video Turkey Campus Attacks Raise Islamic Radicalization Fears

Concerns are growing in Turkey of Islamic radicalization at some universities, after clashes between supporters of the jihadist group Islamic State (IS) or ISIS, and those opposed to the extremists. Pro-jihadist literature is on sale openly on the streets of Istanbul. Critics accuse the government of turning a blind eye to radicalism at home, while Kurds accuse the president of supporting IS - a charge strongly denied. Henry Ridgwell reports from London.
Video

Video Syrian Defector Leaks Shocking Photos of Torture Victims

Shocking photographs purporting to show Syrian torture victims are on display at the U.S. Holocaust Memorial Museum in Washington. The museum says the graphic images are among thousands of photographs recently smuggled out of Syria by a military policeman-turned-defector. As VOA reporter Julie Taboh reports, the museum says the photos provide further evidence of atrocities committed by the government of Syrian President Bashar al-Assad against its own people.
Video

Video Drought-Stricken California Considers Upgrading Water System

A three-year drought in California is causing a water shortage that is being felt on farms and cities throughout the state. As VOA's Mike O’Sullivan reports, water experts, consumers and farmers say California needs to make changes to cope with an uncertain future.
Video

Video TechShop Puts High-tech Dreams Within Reach

Square, a business app and card reader, makes it possible to do credit card transactions through cell phones. But what made Square possible? VOA’s Adrianna Zhang and Enming Liu have the answer.

All About America

AppleAndroid