Obama still hopeful of settlement in 'fiscal cliff' talks
US President Barack Obama, pushing for a deal to avoid the looming tax hikes and spending cuts known as the “fiscal cliff”, entered last-minute talks with US Senate leaders saying he still believed an agreement could be reached before the January 1 deadline.
After Mr Obama and the leaders of Congress held an hour-long, high-stakes meeting to try to avoid the severe, automatic austerity measures that threaten to send the economy sputtering into another recession, the president called the gathering “good and constructive”.
“I’m optimistic we may still be able to reach an agreement that can pass both houses in time,” Mr Obama declared in a brief press conference.
Mr Obama referred to “dysfunction in Washington”, and said the American public is “not going to have any patience for a politically self-inflicted wound to our economy. Not right now”.
Surprisingly, after weeks of postelection gridlock, Senate leaders sounded even more bullish.
The Republican Leader, Senator Mitch McConnell, said he was “hopeful and optimistic” of a deal, adding he hoped a compromise could be presented to rank-and-file politicians as early as tomorrow, a little more than 24 hours before the year-end deadline.
Said Majority Leader Harry Reid: “I’m going to do everything I can” to prevent the tax increases and spending cuts that threaten to send the economy into recession. He cautioned: “Whatever we come up with is going to be imperfect.”
Officials said there was a general understanding that any agreement would block scheduled income tax increases for middle class earners while letting rates rise at upper income levels.
The US faces the fiscal cliff because tax rate cuts dating back to President George W. Bush’s tenure expire at the end of the year.
The pending across-the-board reductions in government spending, which will slice money out of everything from social programmes to the military, were put in place last year as an incentive to both parties to find ways to cut spending.
That solution grew out of the two parties’ inability in 2011 to agree to a grand bargain that would have taken a big bite out of the deficit.
