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China Daily Website

US 'fiscal cliff' talks continue in Senate

Updated: 2012-12-31 10:45
( Xinhua)

WASHINGTON - US lawmakers in the upper house of Congress on Sunday were attempting to strike a last-minute deal to solve the so-called "fiscal cliff", but the two sides have not inked a deal as the nation neared the verge of cliff.

Top Senate Democrat Harry Reid on Sunday afternoon said on the Senate floor that Senate Minority Leader Mitch McConnell, the top GOP senator, made an offer last night but Democrats were unable to make a counter-offer at this stage.

US 'fiscal cliff' talks continue in Senate

US Senate Majority Leader Harry Reid (D-NV) speaks with the media as he leaves the Senate Chamber at the US Capitol in Washington Dec 30, 2012. [Photo/Agencies]

There was no single issue blocking a bipartisan agreement but that the "sticking point" seemed to be a willingness and courage to close the deal, McConnell said on the Senate floor, two days before a slew of tax hikes and government spending cuts to kick in.

Unless US Congress acts by the end of the year, a combination of tax increases and sweeping spending cuts totaling about 600 billion dollars will kick in, the effects of which could thrust the economy back into recession.

Obama on Friday entrusted Reid and McConnell with the task of finding a possible solution to the high-stakes "fiscal cliff." If they could not find a viable plan, Obama would ask for a vote on his own proposal that extends the current tax rates for all but the rich with annual income above 250,000 US dollars and extends the nation's unemployment benefits for 2 million people.

"There are still significant differences between the two sides, " Reid said on the Senate floor on Sunday evening, adding that there was no vote on a proposal to avert the "fiscal cliff" Sunday.

Reid noted that the negotiations between Democrats and Republicans were continuing and that "there is still time left to reach an agreement."

Some GOP lawmakers said that US Vice-President Joe Biden was also involved in the talks and that Democrats were demanding that the two sides should turn off two years of automatic spending cuts in the deal, not just those in the amount of about 110 billion dollars in 2013.

About $1.2 trillion dollars of automatic spending cuts in defense and non-defense domestic programs was scheduled to take place over the next decade starting in 2013 as agreed by Democrats and Republicans in 2011.

Reid said he will update his colleagues on the latest development of the negotiations on Monday morning.

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