US political foes confident of deal to avoid 'fiscal cliff'

Congressional leaders from both parties in the US voiced fresh optimism after meeting newly re-elected President Barack Obama about avoiding year-end “fiscal cliff” tax increases and spending cuts that would hammer America’s middle class and risk plunging the economy into recession.

Mr Obama’s Democrats and opposition Republicans have until the end of the year to work out a deal each side could live with, and that would have a softer impact on the economy that is still recovering very slowly from the last recession.