News / USA

US Leaders Facing 'Fiscal Cliff' Decisions

The U.S. Capitol building
The U.S. Capitol building
VOA News
U.S. leaders are edging closer to an end-of-the-year "fiscal cliff" - sharp, mandated government spending cuts and tax increases for most American workers that could plunge the country into another recession if a compromise is not reached.

Congressional leaders continued to work Sunday to negotiate a pact that would keep tax rates at their current level for all but the wealthiest wage earners, rather than have them revert on New Year's Day to much higher levels set in the 1990s.

Both the Senate and House scheduled unusual Sunday sessions to vote on any compromise legislation their leaders might be able to craft in negotiations with the White House. In his weekly address Saturday, U.S. President Barack Obama pressured Congress to act, saying the country's economy would be damaged if tax rates increase.

"We just can’t afford a politically self-inflicted wound to our economy," he said.  "The economy is growing, but keeping it that way means that the folks you sent to Washington have to do their jobs.  The housing market is healing, but that could stall if folks are seeing smaller paychecks.  The unemployment rate is the lowest it’s been since 2008, but already, families and businesses are starting to hold back because of the dysfunction they see in Washington."

Watch President Obama's weekly address:



Resolution of tax and spending issues has long stymied Washington leaders, with Obama's Democratic Party colleagues mostly favoring higher taxes to fund popular social welfare programs, while Republican Party lawmakers adamantly oppose tax increases, even for the wealthiest Americans.


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 negotiators are also grappling with decisions on other key issues, including unemployment benefits, taxes on large inheritances and possible cuts in payments to doctors who treat elderly Americans.

Even if the Democratic-controlled Senate votes for a compromise deal, the Republican-led House of Representatives would also have to approve the measure. Passage of tax-and-spending legislation there is far from certain.

However, if Congress can agree on a compromise, the president could sign the measure late Monday, which would avoid having automatic tax increases on nearly all Americans kick in Tuesday.

Neither side has publicly given any indication that a deal can be reached.

Even if a deal is reached, however, it is unlikely to increase the U.S. government's current borrowing limit of $16.4 trillion. Treasury Secretary Timothy Geithner says the nation's debt ceiling will be reached Monday, New Year's Eve.  The ceiling is a cap on how much money the government can borrow to avoid defaulting on its debt.

Geithner says Treasury officials will take what he calls "extraordinary measures" under the law to avoid default.

The Congress and White House are then expected to negotiate a new limit in the next couple months, although it, too, will likely produce a contentious debate over Washington's spending priorities.

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

You May Like

EU Court Fines Poland for Hosting CIA 'Black Sites'

Ruling is first time a court has acknowledged suspects were held and tortured at the sites, under US program launched following the 9/11 terrorist attacks More

Migrant Issues Close to Home Spur Groups to Take Action

Groups placing water, food in the desert, or aiding detainees after release, have one common goal: no more deaths of migrants crossing illegally into the US More

Video At AIDS Conference, Prevention Pill Stirs Excitement

Truveda shows promise, spurring debate over access and other approaches More

This forum has been closed.
Comment Sorting
Comments
     
by: rgw46 from: usa
December 30, 2012 1:54 PM
Also pass around..ALL current taxes(codes) eliminate .One tax for ALL..falt tax..sales..no exceptions..something we ALL can watch.and again NO exceptions


by: dan from: calif
December 30, 2012 11:15 AM
No debt limit increase. Get you filthy hands out of the pockets of our children and grand children.


by: wing ding from: chicago
December 30, 2012 9:19 AM
A continuing embarrassment - that's our "government." Suggest we clean up at home before we go proselyting to other countries. Or maybe we could learn a thing or two about democracy from those who are fighting for it as we speak.

In Response

by: rgw46 from: usa
December 30, 2012 1:52 PM
>Pass this around<what is amazing..all the news and comments..these CAREER politicians that are elected> and YOU people should listen<get paid by us..tax payers, along with there Medical/retirement..I say..STOP all pay..they are to GET out of DC..close down there fancy offices and apartments that WE tax payers pay for..and send them home..They can Tel Conference to do the same thing>> NOTHING << and stop there PAY and benefits until it is fixed..

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Treatment for Childhood Epilepsy Heats up Medical Marijuana Debatei
X
Shelley Schlender
July 24, 2014 6:43 PM
In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video Death Toll From Israel-Gaza Conflict Surpasses 700

Gaza officials say a shelling hit a compound housing a United Nations-run school in the Gaza Strip, killing more than a dozen people, during an Israeli offensive in the area. Heavy fighting between the Israeli military and Hamas militants continued on Thursday, pushing up the death toll. So far, more than 730 Palestinians and 35 Israelis have been killed in the conflict. VOA's Scott Bobb has the latest from Jerusalem.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video Israel Targets Gaza Supply Tunnels

The Israeli military has launched a ground operation in Gaza to destroy the myriad tunnels that may have been used to smuggle weapons to Hamas. VOA's Zlatica Hoke reports that could mean more hardship for the people of Gaza, who obtain some of their essential supplies through these underground passages
Video

Video Researchers Target Low-Cost Avatar Technology

Scientists at the University of Southern California Institute for Creative Technologies say 3-dimensional representations could revolutionize social media. Elizabeth Lee has more from Los Angeles.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video In Cambodia, HIV Diagnosis Brings Deadly Shame

Although HIV/AIDS is now a treatable condition, a positive diagnosis is still a life altering experience. In Cambodia, people living with HIV are often disowned by friends, family and the community. This humiliation can be unbearable. We bring you one Cambodian woman’s struggle to overcome a life tragedy and her own HIV positive diagnosis.

AppleAndroid