Back to the office for Obama and a cliffhanger over budget
THIS WEEK:The US Congress returns for a “lame-duck” session tomorrow but it will be anything but a quiet wind-down to year end as the “fiscal cliff” looms.
The so-called fiscal cliff is a term to describe a series of tax rises and spending cuts due to take effect in January 2013 in the absence of agreement on a balanced budget.
In total, the measures are set to cut the federal budget deficit by $607 billion or about 4 per cent of GDP between 2012 and 2013, according to the congressional budget office.
Congress and the White House have been at loggerheads over moves to balance the federal budget since the Democrats lost control of the House of Representatives in 2010. Unless Congress can strike an agreement on a budget that reduces the debt, the spending cuts are set to kick in automatically in January.
The prospect of Mr Obama and Congress struggling to agree on the issue weighed heavily on global financial markets last week, sending Wall Street stocks into a post-election funk.
Accused by Republicans of being a deeply partisan president, Mr Obama promised in his victory speech to work with Congress to reduce the deficit and reform the tax system.