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Washington Stirs for "fiscal cliff" Talks as Obama Heads Home

27 Dec 2012

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 President Barack Obama


( Reuters) - Efforts to prevent the U.S. economy from going over a "fiscal cliff" stirred back to life on Wednesday with less than a week to go before potentially disastrous tax hikes and spending cuts kick in at the New Year.


In a sign that there may be a way through deadlock in Congress, Republican House of Representatives Speaker John Boehner urged the Democrat-controlled Senate to act to pull back from the cliff and offered to at least consider any bill the upper chamber produced.
President Barack Obama will try to revive budget crisis talks - which stalled last week - when he returns to Washington on Thursday after cutting short his Christmas holiday in Hawaii.


But the White House and Republicans are still far apart, as hopes for legislation to prevent the economy from tumbling off the fiscal cliff switch to the Senate, reports Reuters.
Democrats control a majority in that chamber but still need some support from Republicans across the aisle for a likely attempt to raise taxes on the wealthy.


A senior administration official told reporters traveling with Obama in Hawaii that senior Republican leaders in Congress, Senator Mitch McConnell and Boehner, should step up to head off the looming tax and spending hit.
"It's up to the Senate Minority Leader not to block a vote, and it's up the House Republican leader, the Speaker of the House ... to allow a vote," the official said.
Months of congressional gridlock on how reduce the deficit and rein in the nation's $16 trillion federal debt have begun to affect ordinary Americans.


Shoppers might have spent less this holiday season for fear of looming income tax increases and reports of lacklustre retail holiday sales added to the urgency for a deal. U.S. stocks fell on Wednesday, dragged lower by shares of retail companies.
TREASURY BUYING TIME

To avoid defaulting on the national debt if the budget crisis spins out of control, the Treasury Department announced measures essentially designed to buy time to allow Congress to resolve its differences and raise the debt borrowing limit.
Obama flies back from Hawaii overnight and is due in the White House on Thursday morning.


Starbucks Chief Executive Howard Schultz is urging workers in the company's roughly 120 Washington-area coffee shops to write "come together" on customers' cups on Thursday and Friday to tell politicians to end the crisis.


"We're paying attention, we're greatly disappointed in what's going on and we deserve better," Schultz told Reuters.
Boehner and his House Republican leadership team said in a statement that "the Senate must act first."


That puts the ball in the court of the Democrats in the Senate, which is likely to base any legislation on a bill it passed earlier this year to continue tax breaks for households with incomes below $250,000.

Tags: Business, World, Barack Obama

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