U.S. President Barack Obama returns to Washington Thursday to begin a one last effort to reach a deal with Congress to prevent automatic tax hikes and spending cuts from taking effect next week.
Obama departed Hawaii late Wednesday night, cutting short his Christmas holiday vacation as the country moves closer to the so-called "fiscal cliff" on New Year's Day. Many economists fear the combination of $500 billion in tax increases and spending cuts could push the fragile U.S. economy back into recession.
Republican House Speaker John Boehner issued a statement Wednesday calling on the Democratic-controlled Senate to pass a long-term deficit reduction package that would prevent the "fiscal cliff."
Talks between Boehner and Obama collapsed last week. Boehner then failed to convince his own Republican bloc to approve an alternative plan that would have raised taxes only on Americans making $1 million per year or above. The president had offered to allow taxes to rise on those making at least $400,000 a year.
Observers say congressional leaders could allow income tax rates to rise on all Americans on January 1st, then pass legislation that would reduce taxes on everybody except the wealthy. The Senate will likely approve a measure that would allow tax hikes on those making $250,000 or more -- a figure that Obama had proposed during his re-election bid.
The president has said increasing taxes for the wealthiest Americans must be a part of any agreement, while Boehner and most Republicans are opposed to tax increases of any kind.
Meanwhile, U.S. Treasury Secretary Timothy Geithner said Wednesday that the nation's debt ceiling will reach its $16.4 trillion limit next Monday, New Year's Eve. The ceiling is a limit on how much money the government can borrow to avoid defaulting on its debt.
No comments:
Post a Comment