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Fiscal cliff: Obama 'makes no new offer' | Fiscal cliff: Obama 'makes no new offer' |
(about 1 hour later) | |
US President Barack Obama has used a last-ditch White House meeting to urge Congress to back an interim plan to avoid the "fiscal cliff", reports say. | US President Barack Obama has used a last-ditch White House meeting to urge Congress to back an interim plan to avoid the "fiscal cliff", reports say. |
He reportedly asked Republican and Democratic leaders to back tax cuts for those earning under $250,000. | |
They have only four days to reach an agreement before across-the-board tax rises and spending cuts take effect. | They have only four days to reach an agreement before across-the-board tax rises and spending cuts take effect. |
Analysts say sliding over the "cliff" could tip the US into recession and set back the global economic recovery. | Analysts say sliding over the "cliff" could tip the US into recession and set back the global economic recovery. |
There appeared to be no immediate resolution after the meeting, but Mr Obama is due to make a statement at 17:45 EST (22:45 GMT). | |
New optimism? | New optimism? |
President Obama cut short his holiday in Hawaii to resume the negotiations. The Senate returned to work on Thursday, with the House due back on Sunday. | |
Reports ahead of the meeting suggested the president would propose a limited package including the renewal of most expiring tax cuts, and a delay or replacement of some spending cuts. | Reports ahead of the meeting suggested the president would propose a limited package including the renewal of most expiring tax cuts, and a delay or replacement of some spending cuts. |
But as the meeting at the White House began, US media reported that the president was making no new offer, instead seeking a simple vote on extending tax cuts for middle class Americans. | But as the meeting at the White House began, US media reported that the president was making no new offer, instead seeking a simple vote on extending tax cuts for middle class Americans. |
There was no word on whether Republican House Speaker John Boehner and Senate minority leader Mitch McConnell were open to a deal or had a counter-offer. | There was no word on whether Republican House Speaker John Boehner and Senate minority leader Mitch McConnell were open to a deal or had a counter-offer. |
Democratic Senate majority leader Harry Reid and senior House figure Nancy Pelosi were also at the White House. | Democratic Senate majority leader Harry Reid and senior House figure Nancy Pelosi were also at the White House. |
Earlier, there was upbeat rhetoric from some senators. | Earlier, there was upbeat rhetoric from some senators. |
"I'm getting a little more optimistic today. Sometimes it's darkest before the dawn and there are two good signs for optimism today," senior Democrat Chuck Schumer told NBC's Today show. | "I'm getting a little more optimistic today. Sometimes it's darkest before the dawn and there are two good signs for optimism today," senior Democrat Chuck Schumer told NBC's Today show. |
Republican Jon Kyl told Bloomberg News: "Everybody recognises we're either going to get something in the next few hours or not. There's no more posturing time left." | Republican Jon Kyl told Bloomberg News: "Everybody recognises we're either going to get something in the next few hours or not. There's no more posturing time left." |
Mr Obama's plans to increase taxes on the wealthiest Americans have remained a point of division between the two parties since he won re-election in November. | Mr Obama's plans to increase taxes on the wealthiest Americans have remained a point of division between the two parties since he won re-election in November. |
Many Republicans oppose new taxes as a matter of principle, and are demanding cuts to what they see as deficit-inflating public spending, putting at risk healthcare and welfare benefit schemes popular with Democrats. | Many Republicans oppose new taxes as a matter of principle, and are demanding cuts to what they see as deficit-inflating public spending, putting at risk healthcare and welfare benefit schemes popular with Democrats. |
An alternative plan proposed by House Speaker John Mr Boehner - which would have seen taxes rise only on those earning over $1m - failed in the House of Representatives late last week. | An alternative plan proposed by House Speaker John Mr Boehner - which would have seen taxes rise only on those earning over $1m - failed in the House of Representatives late last week. |
Speaking on Thursday, the Democratic majority leader in the Senate, Harry Reid, said he thought a deal was unlikely. Later, Senate Republican leader Mitch McConnell said his colleagues were unwilling to sign a "blank cheque". | Speaking on Thursday, the Democratic majority leader in the Senate, Harry Reid, said he thought a deal was unlikely. Later, Senate Republican leader Mitch McConnell said his colleagues were unwilling to sign a "blank cheque". |
"Hopefully there is still time for an agreement of some kind that saves the taxpayers from a wholly preventable economic crisis." | "Hopefully there is still time for an agreement of some kind that saves the taxpayers from a wholly preventable economic crisis." |
In the Senate chamber on Thursday, Mr Reid said the requirement to get at least 60 of 100 votes to move to a vote on any legislation almost certainly doomed any new plan unless Republicans gave it strong backing. | In the Senate chamber on Thursday, Mr Reid said the requirement to get at least 60 of 100 votes to move to a vote on any legislation almost certainly doomed any new plan unless Republicans gave it strong backing. |
"It looks like that [the fiscal cliff] is where we're headed," Mr Reid said. | "It looks like that [the fiscal cliff] is where we're headed," Mr Reid said. |
Cuts and benefits | Cuts and benefits |
The term fiscal cliff refers to the combination of almost $600bn (£370bn) of tax rises and spending cuts due to come into force on 1 January if Congress does not pass new legislation. | The term fiscal cliff refers to the combination of almost $600bn (£370bn) of tax rises and spending cuts due to come into force on 1 January if Congress does not pass new legislation. |
Sweeping tax cuts passed during the presidency of George W Bush will expire, eventually affecting people of all income levels, and many businesses. | Sweeping tax cuts passed during the presidency of George W Bush will expire, eventually affecting people of all income levels, and many businesses. |
Other tax cuts and benefits to expire include: | Other tax cuts and benefits to expire include: |
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In addition, spending cuts mandated by a law passed to break a previous fiscal impasse in Congress will come into force, affecting both military and domestic budgets. | In addition, spending cuts mandated by a law passed to break a previous fiscal impasse in Congress will come into force, affecting both military and domestic budgets. |
The cuts are expected to affect federal government departments and the defence sector, as well as hitting unemployment insurance and veterans' support. | The cuts are expected to affect federal government departments and the defence sector, as well as hitting unemployment insurance and veterans' support. |