3 weeks to reach budget deal or economy goes over fiscal cliff

Print
Email
|

Associated Press

Posted on December 11, 2012 at 7:21 AM

Updated Tuesday, Dec 11 at 12:25 PM

WASHINGTON (AP) -- The Federal Reserve is expected soon to announce a new bond-buying plan that would at least soften the blow from tax increases and spending cuts that'll kick in in January if Congress can't reach a budget deal.

Meanwhile, the White House and Republicans aren't showing any outward signs of yielding. Quiet negotiations to avoid an economy-rattling "fiscal cliff" yielded no tangible signs of progress on Monday.

President Barack Obama continues to insist that the GOP endorse higher tax rates for wealthy Americans. House Speaker John Boehner says he's waiting for Obama to identify the spending cut's he's willing to make.

The negotiations are designed to prevent across-the-board tax increases and spending cuts scheduled to begin at the turn of the year, a combination that economists say poses the threat of a new recession.

While leaders in both parties say they are eager to avoid that "cliff," efforts to agree on a plan to cut deficits by other measures have turned into a major post-election showdown between opposing sides in a divided government.

Sen. Mitch McConnell complained on Tuesday that Obama has spent his time talking about raising tax rates but has failed to specify where he would reduce out-of-control government spending.

The Kentucky Republican cited recent studies on wasteful government spending, including $325,000 on a Robotic squirrel name RoboSquirrel.

Print
Email
|