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Fiscal cliff: Obama 'optimistic' on Senate-led deal | Fiscal cliff: Obama 'optimistic' on Senate-led deal |
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US President Barack Obama says he is "modestly optimistic" that a deal to avoid the "fiscal cliff" is possible, after a last-ditch White House meeting. | US President Barack Obama says he is "modestly optimistic" that a deal to avoid the "fiscal cliff" is possible, after a last-ditch White House meeting. |
Mr Obama said Senate leaders were working to craft a bill that could win approval in both chambers of Congress. | Mr Obama said Senate leaders were working to craft a bill that could win approval in both chambers of Congress. |
But if a compromise was not reached, the president said he would ask for a quick vote on preventing tax rises. | But if a compromise was not reached, the president said he would ask for a quick vote on preventing tax rises. |
Congress has only four days to reach an agreement before across-the-board tax rises and spending cuts take effect. | Congress has only four days to reach an agreement before across-the-board tax rises and spending cuts take effect. |
Analysts say sliding over the so-called "cliff" could tip the US into recession and set back the global economic recovery. | Analysts say sliding over the so-called "cliff" could tip the US into recession and set back the global economic recovery. |
If Senate majority leader Harry Reid and minority leader Mitch McConnell do not work out a deal, Mr Obama is seeking a vote to prevent tax rises on incomes up to $250,000 (£150,000) and ensure unemployment insurance is continued. | If Senate majority leader Harry Reid and minority leader Mitch McConnell do not work out a deal, Mr Obama is seeking a vote to prevent tax rises on incomes up to $250,000 (£150,000) and ensure unemployment insurance is continued. |
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America's reckless politicians may still take the country over the cliff into an uncertain land where recession looms.” | |
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He described that as the "bare minimum" Congress should get done before 1 January. | He described that as the "bare minimum" Congress should get done before 1 January. |
"The hour for immediate action is here, it is now," Mr Obama said. | "The hour for immediate action is here, it is now," Mr Obama said. |
'Imperfect' deal | 'Imperfect' deal |
Earlier on Friday, Mr Obama met Mr Reid, Mr McConnell, House Speaker John Boehner and House minority leader Nancy Pelosi at the White House for just over an hour. | Earlier on Friday, Mr Obama met Mr Reid, Mr McConnell, House Speaker John Boehner and House minority leader Nancy Pelosi at the White House for just over an hour. |
Mr McConnell and Mr Reid said they were entering talks shortly after the meeting, and gave relatively upbeat assessments on their task. | Mr McConnell and Mr Reid said they were entering talks shortly after the meeting, and gave relatively upbeat assessments on their task. |
Mr McConnell said he was "hopeful and optimistic" that he could present a comprise to his caucus by Sunday, just over 24 hours before the deadline. | Mr McConnell said he was "hopeful and optimistic" that he could present a comprise to his caucus by Sunday, just over 24 hours before the deadline. |
His Democratic counterpart said he would "do everything I can" to make the deal happened. | His Democratic counterpart said he would "do everything I can" to make the deal happened. |
But Mr Reid cautioned that "whatever we come up with is going to be imperfect". | But Mr Reid cautioned that "whatever we come up with is going to be imperfect". |
The renewed effort towards a Senate deal that could pass both chambers comes after much of the focus in negotiations rested on House Speaker John Boehner. | The renewed effort towards a Senate deal that could pass both chambers comes after much of the focus in negotiations rested on House Speaker John Boehner. |
An alternative plan proposed by 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 Mr Boehner - which would have seen taxes rise only on those earning over $1m - failed in the House of Representatives late last week. |
Mr Boehner has called the lower chamber into session on Sunday. A staff member in the house speaker's office told Reuters that the House would consider Senate legislation. | Mr Boehner has called the lower chamber into session on Sunday. A staff member in the house speaker's office told Reuters that the House would consider Senate legislation. |
"The Speaker told the president that if the Senate amends the House-passed legislation and sends back a plan, the House will consider it - either by accepting or amending," the unnamed aide said. | "The Speaker told the president that if the Senate amends the House-passed legislation and sends back a plan, the House will consider it - either by accepting or amending," the unnamed aide said. |
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. |
During the news conference on Friday, Mr Obama said any last minute action on tax rises would form the groundwork for further negotiations in the new year. | During the news conference on Friday, Mr Obama said any last minute action on tax rises would form the groundwork for further negotiations in the new year. |
"The American people are watching what we do here," he said. "Obviously their patience is already thin." | "The American people are watching what we do here," he said. "Obviously their patience is already thin." |
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 set to expire include: | Other tax cuts and benefits set to expire include: |
• A 2010 payroll tax cut, the expiration of which would prompt immediate wage-packet cuts | • A 2010 payroll tax cut, the expiration of which would prompt immediate wage-packet cuts |
• Benefits for the long-term unemployed | • Benefits for the long-term unemployed |
• Compensation for doctors treating patients on federal healthcare programmes | • Compensation for doctors treating patients on federal healthcare programmes |
• Inheritance taxes are also likely to be affected if no deal is reached. | • Inheritance taxes are also likely to be affected if no deal is reached. |
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. |