Obama Faces Immediate Spending, Tax Issues

U.S. President Barack Obama celebrates after winning the U.S. presidential election in Chicago, Illinois, November 7, 2012.
U.S. President Barack Obama celebrates after winning the U.S. presidential election in Chicago, Illinois, November 7, 2012.
VOA News
Newly re-elected U.S. President Barack Obama faces an immediate confrontation with Congress over key tax and spending issues even before he is sworn in for a second term in January.

The president and lawmakers in Congress delayed decisions until after the election on how to deal with the country's looming "fiscal cliff" - $600 billion in automatic tax increases and spending cuts that are set to take effect January 1.

Now, they have just until the end of the year to reach an agreement to delay the mandated tax hikes and cuts in key defense and domestic programs - or find a compromise that has proved elusive in the past.

Economic analysts say that if Obama and Congress fail to act and the tax increases and spending cuts take effect, it could plunge the American economy into another recession. The country's economy, the world's largest, is advancing, but only sluggishly, as it struggles to recover from the worst economic downturn since the Great Depression in the 1930s.

But reaching an agreement is likely to be difficult.

The "fiscal cliff" mandates were set only because the president, a Democrat, and the Republican-controlled House of Representatives stalemated over numerous tax and spending issues during the last two years. 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.

One key issue is whether to extend tax cuts that affect all American workers. Republicans want to keep all of them in place. Obama has long sought - unsuccessfully - to end them for the country's wealthiest taxpayers, such as for couples earning more than $250,000 a year.

But the Republican leader of the House, Speaker John Boehner, told those gathered at his victory celebration Tuesday night that the results of the election showed that Americans do not want higher taxes.

"The American people have also made clear there's no mandate for raising tax rates. Americans want solutions that will ease the burdens of small businesses, bring jobs home and let our economy grow," he said.

As the cumulative U.S. government debt total continues to mount, the U.S. will also face a decision early in 2013 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 political opponents.
This forum has been closed.
Comment Sorting
Comments
     
by: malack mathias from: Tanzania
November 08, 2012 5:54 AM
the honorable president obama do much effort as you can to rebuild american economy by bearing that you need selective good team to help you in meeting the strategic plan and African has a trust on you, help us please from darkness by remembering that you are the world president not for American only.

by: RIANO BAGGY from: INA
November 08, 2012 1:07 AM
that good start Mr President, it's time to acts your promise during campaign.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Turkey's Main Opposition Party Hopes for Election Breakthroughi
X
May 22, 2015 10:23 AM
Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Turkey's Main Opposition Party Hopes for Election Breakthrough

Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Europe Follows US Lead in Tackling ‘Conflict Minerals’

Metals mined from conflict zones in places like the Democratic Republic of Congo are often sold by warlords to buy weapons. This week European lawmakers voted to force manufacturers to prove that their supply chains are not inadvertently fueling conflicts and human rights abuses. Henry Ridgwell reports from London.
Video

Video Class Tackles Questions of Race, Discrimination

Unrest in some U.S. cities is more than just a trending news item at Ladue Middle School in St. Louis, Missouri. As VOA’s Kane Farabaugh reports, it’s a focus of a multicultural studies class engaging students in wide-ranging discussions about racial tensions and police aggression.
Video

Video Mind-Controlled Prosthetics Are Getting Closer

Scientists and engineers are making substantial advances towards the ultimate goal in prosthetics – creation of limbs that can be controlled by the wearer’s mind. Thanks to sophisticated sensors capable of picking up the brain’s signals, an amputee in Iceland is literally bringing us one step closer to that goal. VOA’s George Putic reports.
Video

Video Afghan Economy Sinks As Foreign Troops Depart

As international troops prepare to leave Afghanistan, and many foreign aid groups follow, Afghans are grappling with how the exodus will affect the country's fragile economy. Ayesha Tanzeem reports from the Afghan capital, Kabul.
Video

Video Poverty, Ignorance Force Underage Girls Into Marriage

The recent marriage of a 17-year old Chechen girl to a local police chief who was 30 years older and already had a wife caused an outcry in Russia and beyond. The bride was reportedly forced to marry and her parents were intimidated into giving their consent. The union spotlighted yet again the plight of many underage girls in developing countries. Zlatica Hoke reports poverty, ignorance and fear are behind the practice, especially in Asia and Africa.
Video

Video South Korea Marks Gwangju Uprising Anniversary

South Korea this week marked the 35th anniversary of a protest that turned deadly. The Gwangju Uprising is credited with starting the country’s democratic revolution after it was violently quelled by South Korea’s former military rulers. But as Jason Strother reports, some observers worry that democracy has recently been eroded.
Video

Video California’s Water System Not Created To Handle Current Drought

The drought in California is moving into its fourth year. While the state's governor is mandating a reduction in urban water use, most of the water used in California is for agriculture. But both city dwellers and farmers are feeling the impact of the drought. Some experts say the state’s water system was not created to handle long periods of drought. Elizabeth Lee reports from Ventura County, an agricultural region just northwest of Los Angeles.
Video

Video How to Clone a Mammoth: The Science of De-Extinction

An international team of scientists has sequenced the complete genome of the woolly mammoth. Led by the Swedish Museum of Natural History in Stockholm, the work opens the door to recreate the huge herbivore, which last roamed the Earth 4,000 years ago. VOA’s Rosanne Skirble considers the science of de-extinction and its place on the planet
Video

Video Blind Boy Defines His Life with Music

Cole Moran was born blind. He also has cognitive delays and other birth defects. He has to learn everything by ear. Nevertheless, the 12-year-old has had an insatiable love for music since he was born. VOA’s June Soh introduces us to the young phenomenal harmonica player.

VOA Blogs