Obama hopes fiscal deal before Christmas

2012-11-28 22:33
Barack Obama (Jacquelyn Martin, AP)

Barack Obama (Jacquelyn Martin, AP)

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Washington - President Barack Obama said on Wednesday he believes a framework to cut the country's massive debt can be reached before Christmas.

Obama and a divided Congress are under pressure to strike a deal to avoid a package of austerity measures known as the "fiscal cliff" that will take effect 1 January. The measures threaten to return the country to recession.

Obama wants to protect the middle class from higher taxes as part of any deal.

"It's too important for Washington to screw this up," Obama said in a brief speech on Wednesday.

The overall economic impact of the fiscal cliff has been estimated at more than $670bn for next year alone. But the country is also under pressure to reduce its massive deficit.

An administration official said two of Obama's top negotiators on the fiscal cliff will meet separately on Thursday with leading lawmakers.

Treasury Secretary Timothy Geithner and White House legislative chief Rob Nabors will meet with Republican House Speaker John Boehner, Senate Republican leader Mitch McConnell, Democratic Senate Majority Leader Harry Reid and House Democratic leader Nancy Pelosi.

The official spoke on condition of anonymity because the meetings had not yet been publicly announced.

Obama spoke on Wednesday before meeting with top business leaders at the White House on ways to keep the economy growing and find a balanced way to reduce the US deficit.

Expected at the meeting were the CEOs of Coca-Cola, Home Depot and others.

Taxes are the most sensitive issue in the fiscal talks. Obama is urging the public to pressure Congress through social media, pointing to #My2K on Twitter - a reference to the estimated $2 200 tax increase a typical middle-class family of four would see if tax cuts introduced during the presidency of George W Bush expire on 1 January.

Obama wants to let the tax cuts expire for families making more than $250 000 a year. Top Republicans don't like that idea.

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