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| Fiscal cliff: Barack Obama in last-ditch talks to avert budget crisis | Fiscal cliff: Barack Obama in last-ditch talks to avert budget crisis |
| (30 days later) | |
| Washington has been gearing up for a final effort to avert the fiscal-cliff budget crisis, with Barack Obama arranging urgent talks with congressional leaders and legislators who cut short holiday plans to return to the Capitol. | Washington has been gearing up for a final effort to avert the fiscal-cliff budget crisis, with Barack Obama arranging urgent talks with congressional leaders and legislators who cut short holiday plans to return to the Capitol. |
| After a day of recriminations on Thursday, there were signs of hope as senior senators said they believed a deal could be brokered. "I am hopeful there will be a deal that avoids the worst parts of the fiscal cliff, namely taxes going up on middle-class people,'' the Democrat senator, Chuck Schumer, told NBC's Today news show. "I think there can be, and I think the odds are better than people think that there could be." | After a day of recriminations on Thursday, there were signs of hope as senior senators said they believed a deal could be brokered. "I am hopeful there will be a deal that avoids the worst parts of the fiscal cliff, namely taxes going up on middle-class people,'' the Democrat senator, Chuck Schumer, told NBC's Today news show. "I think there can be, and I think the odds are better than people think that there could be." |
| "I think in the end we'll get a deal,'' said the Republican senator, John Thune. "The question is the timing of that. It is encouraging that sides are sitting down. They continue to have lines of communication there open, and I view that as optimistic as well." | "I think in the end we'll get a deal,'' said the Republican senator, John Thune. "The question is the timing of that. It is encouraging that sides are sitting down. They continue to have lines of communication there open, and I view that as optimistic as well." |
| On Friday night Obama was due to meet with the Republican House speaker, John Boehner, and the Senate minority leader, Mitch McConnell, as well as Democrat colleagues Nancy Pelosi and Harry Reid in the hopes of thrashing out a deal. | On Friday night Obama was due to meet with the Republican House speaker, John Boehner, and the Senate minority leader, Mitch McConnell, as well as Democrat colleagues Nancy Pelosi and Harry Reid in the hopes of thrashing out a deal. |
| US stock markets were on track for their fifth successive day of losses as investors waited nervously for the latest twist in the slow-moving drama. The congressional budget office has warned that going over the fiscal cliff will push the US back into recession and drive unemployment up to 9.1% from the current 7.9%. | US stock markets were on track for their fifth successive day of losses as investors waited nervously for the latest twist in the slow-moving drama. The congressional budget office has warned that going over the fiscal cliff will push the US back into recession and drive unemployment up to 9.1% from the current 7.9%. |
| European markets also reacted badly to the prospect of a stalemate in Washington. The FTSE 100 finished down 29 points at 5,925; the Dax was down 43 at 7,612. The Spanish Ibex 35, which has recovered from less than 6,000 at the height of the country's bankruptcy crisis in the summer to climb to more than 8,300, was down 149 points to 8,131. | European markets also reacted badly to the prospect of a stalemate in Washington. The FTSE 100 finished down 29 points at 5,925; the Dax was down 43 at 7,612. The Spanish Ibex 35, which has recovered from less than 6,000 at the height of the country's bankruptcy crisis in the summer to climb to more than 8,300, was down 149 points to 8,131. |
| Bankia, the lender that received the biggest Spanish bailout, fell as much as 34% after figures revealed its bad debts had escalated. Poor industrial production data from Japan also supported the view of many economists that 2013 was likely to get off to a rocky start. | Bankia, the lender that received the biggest Spanish bailout, fell as much as 34% after figures revealed its bad debts had escalated. Poor industrial production data from Japan also supported the view of many economists that 2013 was likely to get off to a rocky start. |
| A flurry of frantic activity in the US capital before Christmas failed to usher in a compromise deal, and there has been no sign of a break through in recent days. On Friday the White House scotched rumours that a new bill was set to be presented to Congress. Without compromise some 88% of Americans will see their taxes rise come 1 January, a wave of deep spending cuts will start to take effect and 2 million long-term unemployed people will lose their benefits. | A flurry of frantic activity in the US capital before Christmas failed to usher in a compromise deal, and there has been no sign of a break through in recent days. On Friday the White House scotched rumours that a new bill was set to be presented to Congress. Without compromise some 88% of Americans will see their taxes rise come 1 January, a wave of deep spending cuts will start to take effect and 2 million long-term unemployed people will lose their benefits. |
| With so little time left to find a solution, most analysts expect a patch solution. Obama has proposed restricting tax increases to those earning more than $250,000, extending unemployment payments and delaying the spending cuts until a permanent solution is found. | With so little time left to find a solution, most analysts expect a patch solution. Obama has proposed restricting tax increases to those earning more than $250,000, extending unemployment payments and delaying the spending cuts until a permanent solution is found. |
| Schumer and Thune's comments came after a day of fierce rhetoric in Washington. Reid, the Democrat Senate leader, lambasted Boehner and his Republican colleagues on Thursday. He said Boehner was operating a "dictatorship" and had delayed compromise before a vote on his role as speaker on 3 January. | Schumer and Thune's comments came after a day of fierce rhetoric in Washington. Reid, the Democrat Senate leader, lambasted Boehner and his Republican colleagues on Thursday. He said Boehner was operating a "dictatorship" and had delayed compromise before a vote on his role as speaker on 3 January. |
| "Members of the House of Representatives are out watching movies and watching their kids play soccer and basketball and doing all kinds of things," Reid said as the Senate sat for the first time since Christmas. "They should be here." | "Members of the House of Representatives are out watching movies and watching their kids play soccer and basketball and doing all kinds of things," Reid said as the Senate sat for the first time since Christmas. "They should be here." |
| Boehner has called back the House of Representatives, which will return to work on Sunday. He warned colleagues to be prepared to work through the new year. | Boehner has called back the House of Representatives, which will return to work on Sunday. He warned colleagues to be prepared to work through the new year. |
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