[QODLink]
Americas

Obama to cut holiday short over fiscal cliff

US president plans to return to Washington from Hawaii for talks on next year's set of tax raises and spending cuts.
Last Modified: 26 Dec 2012 12:31
Obama said on Friday that he would fly back from Hawaii on Wednesday [AFP]

US President Barack Obama is set to cut short his Christmas holiday in Hawaii in order to hold talks on the so-called fiscal cliff, a set of tax increases and spending cuts set to take effect next year. 

Obama is expected to arrive in the capital early on Thursday, according to authorities, raising the possibility of renewed negotiations on a budget deal that could avert austerity measures.

Congress was also expected to return to Washington on Thursday.

Despite weeks of negotiations, Obama's administration has been unable to strike a deal with congressional Republicans that would slash the budget deficit and prevent the fiscal cliff.

The fiscal cliff is the result of a poison pill agreement reached earlier this year that would require major spending reductions, as tax cuts passed under former president George Bush expire at the end of the year - should Democrats and Republicans fail to reach a deal to cut the deficit.

The White House has offered a deal with $1.2t in revenues - by fulfilling an Obama campaign promise to allow the Bush tax cuts to expire for the wealthy -- and nearly $1t in spending cuts.

Republican opposition

Republicans are opposed to raising taxes in principle and have questioned whether the spending cuts proposed by the White House are real.

They have instead offered a deal that would raise $1t in tax revenue - mainly by closing loopholes and ending deductions - and another $1t in spending cuts, including cuts to Medicare and other social programs.

Venting frustration with Republicans, Obama on Friday urged legislators to pass scaled-down legislation that would at least prevent taxes from going up on the vast majority of Americans, those making $250,000 or less per year.

The move would satisfy Obama's demand to raise taxes on the richest US citizens, as all Bush-era taxes will go up on January 1, and Obama only envisions extending the lower rates for middle class earners.

House Republicans led by Speaker John Boehner have meanwhile punted to the Democratically-led Senate, asking Obama and Senate Majority Leader Harry Reid to write up legislation that can pass both houses.

Obama's suggestion would extend tax breaks to 98 percent of Americans - those earning below $250,000 a year.

In talks on a larger compromise, the president had offered to raise that threshold to $400,000.

385

Source:
Agencies
Topics in this article
People
Country
City
Organisation
Featured on Al Jazeera
'Justice for All' demonstrations swell across the US over the deaths of African Americans in police encounters.
Six former Guantanamo detainees are now free in Uruguay with some hailing the decision to grant them asylum.
Disproportionately high number of Aboriginal people in prison highlights inequality and marginalisation, critics say.
Nearly half of Canadians have suffered inappropriate advances on the job - and the political arena is no exception.
Featured
Women's rights activists are demanding change after Hanna Lalango, 16, was gang-raped on a bus and left for dead.
Buried in Sweden's northern forest, Sorsele has welcomed many unaccompanied kids who help stabilise a town exodus.
A look at the changing face of North Korea, three years after the death of 'Dear Leader'.
While some fear a Muslim backlash after café killings, solidarity instead appears to be the order of the day.
Victims spared by the deadly disease are reporting blindness and other unexpected post-Ebola health issues.