US President Barack Obama and Washington’s top Republican, John Boehner, met at the White House yesterday to try to reach a budget deal that would head off steep tax hikes and spending cuts that could push the economy into recession next year.
The 45-minute meeting is a further sign that talks to avert the “fiscal cliff” could be yielding progress after weeks of stalemate.
Boehner — speaker of the Republican-controlled House of Representatives — has edged closer to Obama’s demand to raise taxes on the wealthiest Americans. But the two sides have yet to make headway on tough issues on entitlements.
Boehner has agreed to a tax increase for those earning more than $1m (€759,700) annually, while Obama wants that threshold set at $250,000. His offer knocks down a key Republican road block, and the question now boils down to what Obama will offer in return.
The two sides face a deadline of Dec 31, when $600bn in across-the- board spending cuts and tax hikes are due to kick in. Even if the two men agree to a deal this week, they may not have enough time to get it passed before the new year. In that case, they might agree to extend the deadline by a few weeks.
Republicans understand the clock is ticking and they are confident that Boehner will get a deal they can support in the coming days, a House Republican aide said.
Boehner “won’t sign off on a deal that doesn’t have enough votes to get through”, the aide said.
Investors have been cheered by signs of progress. The Standard & Poor’s 500 index was up 0.87% at midday.
“The fiscal cliff is starting to get ironed out,” said Frank Davis, director of sales and trading at LEK Securities.
© Irish Examiner Ltd. All rights reserved