No sign of fiscal cliff progress in US

US President Barack Obama and the top Republican in Congress appear no closer to giving ground in negotiations aimed at avoiding the December 31 austerity measures of big tax increases and deep spending cuts that threaten to push the nation into a new recession.

No sign of fiscal cliff progress in US

US President Barack Obama and the top Republican in Congress appear no closer to giving ground in negotiations aimed at avoiding the December 31 austerity measures of big tax increases and deep spending cuts that threaten to push the nation into a new recession.

With just 18 days remaining until the so-called “fiscal cliff” deadline, Mr Obama’s schedule showed no meetings over the issue, and a spokesman for House Speaker John Boehner said the two men did not have any follow-up talks on Wednesday after talking twice by phone on Tuesday.

“It’s clear that the president’s just not serious about cutting spending,” Mr Boehner said. “He wants far more in tax hikes than in spending cuts.”

He said that is why there has been no deal.

The talks are weighed down heavily by conservatives’ objections to raising tax rates and Mr Obama’s determination to carry out his campaign promise to start solving the US budget crisis by raising taxes on wealthy Americans.

Beyond that is a deep philosophical disagreement on government spending, especially so-called entitlement programmes such as the Medicare health insurance programme for older Americans and the Social Security pension programme. Republicans want big cuts and Democrats do not.

Neither side has given much ground, and Mr Boehner’s exchange of proposals with Mr Obama seemed to generate more hard feelings than progress.

Federal Reserve chairman Ben Bernanke has said the central bank’s actions would not solve the fiscal crisis, and on Wednesday he warned: “Clearly, the fiscal cliff is having effects on the economy.”

The uncertainty is affecting consumer and business confidence and leading businesses to cut back on investment.

House Democratic leader Nancy Pelosi said a deal must be reached “in the next couple of days or the very beginning of next week” to avoid the fiscal cliff.

She criticised Republican House leaders for sending politicians home on Thursday, saying they should stay in Washington and work on a solution. Last week, most House members left town on Wednesday.

Ms Pelosi said: “Here we are once again having a two-day work week in the Congress of the United States.”

Republican House majority leader Eric Cantor has warned that Congress may stay in session over the Christmas holiday to reach a deal.

The December 31 deadline to stop the expiration of Bush-era tax cuts and the start of across-the-board spending cuts is the result of Washington’s failure to complete a deficit-reduction deal last year.

Even if an agreement is reached, the slow pace of negotiations is jeopardising chances that it could be written into proper legislative form and passed through both the House and Senate before the new Congress convenes on January 3.

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