Obama 'modestly optimistic' for fiscal deal

2012-12-29 10:09
Barack Obama (Picture: AP)

Barack Obama (Picture: AP)

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

kalahari.com

  • The Amateur
    A gripping read that reveals never before published details about the Obama administration's... Now R321.00
    buy now

Washington - President Barack Obama said on Friday he was "modestly optimistic" a last-minute deal was possible with Republicans to avert a "fiscal cliff" crisis that could spark a recession and rock global markets.

Obama said after meeting top congressional leaders that Senate Democrats and Republicans would work overtime this weekend to try to head off a $500 billion time bomb of tax hikes and spending cuts before a January 1 deadline.

"We had a constructive meeting today... I'm modestly optimistic that an agreement can be achieved," the president said, as the mood lifted somewhat after earlier pessimism had sparked a Wall Street selloff.

Entangled in divided Washington, where power is shared, Obama and Republicans have feuded for months over what to do about tax cuts for all Americans first passed by ex-president George W Bush due to expire on Tuesday.

Obama, sensing a mandate from his re-election last month, wants to raise taxes on the rich but exempt the middle class. Republicans want only to close tax loopholes to raise revenue and demand significant spending cuts in return.

But if nothing is done by the deadline, everyone will get a tax hike.

Following the White House talks, Democratic Senate Majority Leader Harry Reid and Republican Minority Leader Mitch McConnell will now take the lead in seeking a deal before Tuesday.

But any agreement would also have to pass the House of Representatives, where there is doubt that any deal signed off by the Democratic president would win favor with restive conservatives in the Republican caucus.

Obama steeled his optimism with a warning: if Reid and McConnell fail to forge a pact, he will demand a vote on his own fallback plan, which would raise taxes on those earning more than $250 000 a year and extend unemployment insurance for two million people.

If Republicans block the move, the White House could argue that Obama's foes saddled middle class Americans with unpopular tax hikes just to protect millionaires.

While each side must for the sake of appearances be seen to be seeking a deal, the easiest way out of the mess might be to allow the economy to go over the cliff, but to fix the problem in the first few days of next year.

Under that scenario, Republicans who are philosophically opposed to raising taxes could back a bill to lower the newly raised rates on almost all Americans without formally hiking taxes on anyone.

Upping the pressure, Reid said late Friday he was readying Obama's package for a vote by Monday if necessary.

The president also vented frustration at America's dysfunctional political system, after he, and lawmakers had to break of Christmas and New Year's vacations following Congress's inability to act well ahead of the deadline.

"Ordinary folks, they do their jobs. They meet deadlines. They sit down and they discuss things and then things happen," Obama said.

"The notion that our elected leadership can't do the same thing is mind-boggling to them. It needs to stop."

McConnell said he was "hopeful and optimistic" after the talks, also involving Republican House Speaker John Boehner and Democratic House Minority Leader Nancy Pelosi.

An aide to Boehner said the talks focused on "potential options and components for a plan that could pass both chambers of Congress" and said the speaker told Obama that the Senate must go first, before the House acts.

Earlier, Wall Street picked up pessimistic signs ahead of the talks.

The Dow Jones Industrial Average dropped 158.20 points or 1.21%, as Washington's perennial gridlock threatened to deal what Obama described as a "politically self-inflicted wound" to the economy.

If no deal is reached by January 1, all Americans will face a tax hike and massive and automatic budget cuts will come into force that budget experts say could trigger a new US recession and cause a spike in unemployment.

It is not clear, however, whether the last ditch Reid and McConnell effort would avert the spending cuts or deal with Obama's separate request to raise the $16 trillion ceiling on government borrowing.

Failure to act on either issue would simply set up a new political showdown early in 2013.

Republican Senator Bob Corker earlier complained that Obama and Democrats in Congress had balked at cutting spending on social programs weighing on the budget and inflating the deficit.

"We're going to end up with a small, kick-the-can-down-the-road bill that creates another fiscal cliff to deal with this fiscal cliff. How irresponsible is that?" Corker told reporters.

Retiring Democratic Senator Ben Nelson warned Americans might need a "parachute".

Read more on:    barack obama  |  us
NEXT ON NEWS24X
SHARE:

Read News24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
2 comments
Add your comment
Comment 0 characters remaining
 

Inside News24

 
/Wine
 

You HAVE to see this MTB Tsunami Fip!

You might not know what a Tsunami Flip is, but just watching this will turn your eyes into saucers. Check out this first-ever MTB Tsunami Flip in contest here.

 
 

Where were you when you last felt alive?

Bear Grylls’ top 10 things kids should do outdoors
Mountain unicycling – say WHAT?
Top tips to ensure you’re running right
Stand-up paddle boarding a great workout

Jobs in Cape Town [change area]

Property [change area]

Travel - Look, Book, Go!

Magical Massinga

Spend 5 nights at the gorgeous Massinga Beach Lodge in Mozambique and only pay for 4 from R13 220 per person sharing. Includes return flights, accommodation, transfers and romantic turndown. Book now!

Kalahari.com - shop online today

Deal of the week!

20% off Afrikaans books, music and DVDs. Offer valid while stocks last. Shop now!

Save up to R1000 on Hisense smartphones!

View the large range of Hisense smartphones. Buy today and save up to R1000!

Hot gaming titles – available for pre-order!

Call of Duty: Advanced Warfare Day Zero Edition, Far Cry 4, Grand Theft Auto 5 and more. Pre-order now!

Get a free eBook

Buy 3 eBooks and get the cheapest FREE. Offer valid while stocks last. Shop now!

Bargain box – 60% off

Reduced prices, very limited stock. While stocks last. Hurry and shop now!

OLX Free Classifieds [change area]

Samsung Galaxy s4

Mobile, Cell Phones in South Africa, Western Cape, Cape Town. Date October 24

Best bargain in big bay

Real Estate, Houses - Apartments for Sale in South Africa, Western Cape, Cape Town. Date October 25

VW Golf 6, 1.6 Trendline (Excellent condition)

Vehicles, Cars in South Africa, Western Cape, Cape Town. Date October 25

Horoscopes
Aquarius
Aquarius

Pushing too hard and doing too much may have left you feeling drained and overwhelmed. You may need time out to recharge and reset...read more

There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.








Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.