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Barack Obama breaks off vacation to deal with fiscal cliff

Barack Obama breaks off vacation to deal with fiscal cliff

Despite weeks of negotiations, Mr Obama has been unable to reach a budget deal with congressional Republicans to slash the deficit and avert the mandatory austerity measures, which could pitch the economy back into recession.

The White House said Tuesday that Mr Obama would fly back from his native Hawaii on Wednesday, cutting short his Christmas break and raising the possibility of renewed negotiations in Washington as early as Thursday.

Democratic and Republican leaders traded blame last week over the failure to reach a deal before the holidays to prevent most Americans from seeing their taxes go up next year.

The so-called 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 W. 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 $1.2 trillion in revenues – by fulfilling an Obama campaign promise to allow the Bush tax cuts to expire for the wealthy – and nearly $1 trillion in spending cuts.

This entry was published on December 29, 2012 at 3:23 am. It’s filed under Politics and tagged . Bookmark the permalink. Follow any comments here with the RSS feed for this post.

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