US Congress in last-gasp budget talks | News | DW | 31.12.2012
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US Congress in last-gasp budget talks

Politicians in Washington have started their last session of 2012 to agree on a 2013 budget. Weekend negotiations have so far failed to produce agreement but there are hints of progress.

FILE -This July 28, 2011, file photo shows the dome of the U.S. Capitol in Washington. During his weekly radio and Internet address Saturday, Sept. 22, 2012, President Barack Obama faulted Congress for leaving town with several pieces of unfinished business on its plate. He accused lawmakers of being more worried about their jobs and their paychecks than their constituents, and he said he wants them to come back in November to finish work on a veterans' job plan, farm policy and helping homeowners refinance. (Foto:J. Scott Applewhite, File/AP/dapd)

USA Kapitol House of Representatives Washington

Congress has started its final sessions for 2012. It is the last chance to either agree on a 2013 budget, accept the current pre-arranged agreement disliked by Republicans and Democrat alike, or find a way to delay rushing over the so-called "fiscal cliff."

"There are a number of issues on which the two sides are apart but discussions continue as I speak," Democrat Senate leader Harry Reid said on Monday afternoon. He has held closed talks with top Republican Senator Mitch McConnell to try to broker a deal.

Reports of an emerging tentative agreement which would extend current tax rates for households making $450,000 (341,000 euros) or less; extend the estate tax at its current level of 3 percent for estates larger than $5 million, and prevent the Alternative Minimum Tax from affecting millions of middle-class workers, have been reported by local media in Washington.

Senate minority whip Jon Kyl confirmed a "lot of progress" has been made but he said it remained unclear if the progress would spur legislation the Senate can vote on before a midnight deadline when the taxes and spending cuts kick-in.

Both sides appear willing to delay by three months automatic spending cuts to defense and domestic programs. This would set the stage for continued fiscal debate over the next few months.

Fiscal cliff

The "fiscal cliff" is a term commonly used to describe two events combined: the expiration of a string of tax cuts implemented by President George W. Bush and extended once already by his successor Barack Obama, and the introduction of a string of severe cuts in spending. Economists have said these simultaneous measures could push the US economy back into recession; they are currently scheduled to come into effect on Tuesday.

Politicians in Washington built this "cliff" for themselves during similar talks last year, deliberately creating a situation deemed so undesirable that it would force progress in the next round of talks.

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Showdown in the Senate

Obama's Democrats, who control the Senate but not the House of Representatives, and the opposition Repbulicans both want to stop many of the cuts and almost all of the tax increases.

Reid's Republican counterpart McConnell, meanwhile, said on Sunday that he had called in Vice President Joe Biden in his search for consensus.

"I'm willing to get this done, but I need a dance partner," McConnell said.

Barack Obama had previously pledged to push for a vote on a proposal he would favor if two-party talks failed. In an NBC interview on Sunday he sought to pressure the opposition, saying their "overriding theme" seemed to be protecting wealthy taxpayers.

msh/bk (AFP, AP, Reuters)

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