Barack Obama 'optimistic' over last-ditch 'fiscal cliff' deal
President has four days left to reach agreement with Republicans and stop sudden tax rises
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Saturday 29 December 2012
President Obama said he was “modestly optimistic” that the US can avert the looming ‘fiscal cliff’ after a meeting with Congressional leaders last night.
Lawmakers have thus far failed to agree on an alternative to the more than $600bn (£370bn) in tax rises and spending cuts due to automatically come into force in the New Year, and hopes of a pact had been diminishing daily since negotiations broke down before Christmas.
But last night, Mr Obama signaled the possibility of a stripped-down deal after meeting with John Boehner and Mitch McConnell, the top Republicans in the House and Senate respectively, and their Democratic counterparts Nancy Pelosi and Harry Reid. The Oval Office discussion, described by the President as “constructive”, was also attended by the US Treasury Secretary, Tim Geithner.
The President said Mr Reid, the Democratic leader of the Senate, and Mr McConnell had agreed to work on a deal that could be passed in time, potentially on Sunday evening, when the House is scheduled to hold a special session. He added that if they failed to come to an agreement, he would ask Congress to vote on a basic package that would protect middle class Americans from tax hikes and maintain unemployment benefits for the more than 2 million who had been out of a job and claiming state aid for more than six months.
No details were forthcoming about the deal in the works in the Senate - but the Washington Post, quoting people briefed on the White House meeting, said the package would likely protect unemployment benefits and shield taxpayers form the alternative minimum tax, which would otherwise hit some 30 million households. Arguments, however, were said to be continuing on where to set the threshold for tax hikes, whether it should be $250,000, as the President initially proposed, or higher.
“I still want to get this done,” Mr Obama insisted after the meeting, which last just over an hour. Proclaiming that the “hour for immediate action is here, it is now,”he added: “Senators Reid and McConnell are working on... an agreement as we speak... But if an agreement isn’t reached in time ... then I will urge Senator Reid to being to the floor a basic package for an up or down vote.”
Mr Reid, who on Thursday warned that a deal was unlikely, also expressed guarded optimism last night, although he warned that a proposal hand’t yet been agreed. “We have a number of different directions we’re going to try to take and we’re going to see what can be worked out... We’ve got to do it now,” he said.
Mr McConnell said: “I’m hopeful and optimistic.” There was no immediate word from Mr Boehner.
Worst case scenario: No deal is struck...
* This week would be the last time that more than two million Americans who have exhausted the basic six months of state unemployment aid receive welfare payments as a special measure lapses.
* Americans on salaries between $40,000 and $65,000 would see their incomes shrink by an average of $1,500 a year. But the initial impact in January would be far less – an average of $130, according to the Tax Policy Center.
* The biggest risk of a delayed pact is to the stock market. Although it has been easing in recent days, investors have not displayed panic as they watch the negotiations. That could change at a moment's notice.
- 1 BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
- 2 Number of young homeless people in Britain is 'more than three times the official figures'
- 3 Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
- 4 The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
- 5 Swedish minister gives strongest case yet on why EU should stop turning away asylum seekers
BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
Isis propaganda video shows 25 Syrian soldiers executed by teenage militants in Palmyra
Number of young homeless people in Britain is 'more than three times the official figures'
Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
More Britons believe that multiculturalism makes the country worse - not better, says poll
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
£7 - £10 per hour: Recruitment Genius: This care provider is looking for Home ...
£30000 - £35000 per annum: Recruitment Genius: One of the UK's leading web des...
£27000 - £35000 per annum: Recruitment Genius: A growing, successful, friendly...
£16000 - £25000 per annum: Recruitment Genius: This family owned, independent ...