US fiscal deal is thrown into doubt
An agreement to resolve the US budget crisis hung in the balance last night despite an overwhelming Senate vote hours earlier in favour of a compromise Bill to end the saga.
Eric Cantor, the Republican leader in the House of Representatives, said last night he does not support the Bill. It remains unclear when the House will consider the Bill.
US president Barack Obama had earlier hailed the vote and called on the House of Representatives to act “without delay”. He was looking for a deal to be in place to calm Wall Street before it reopens today.
The House, where the Republicans have a majority, appeared in no rush to pass the compromise Bill. The office of Republican House speaker John Boehner could not confirm whether he would even schedule a vote on it. In theory, Mr Boehner should be able to push it through with a combination of moderate Republicans and Democrats, even in the face of a revolt by Tea Party-backed members of Congress.
The Bill seemed to have provided a partial victory for Mr Obama, fulfilling an election campaign promise to raise taxes on the wealthiest. But he failed to secure agreement on the bigger economic issues, thus ensuring another showdown with Congress as early as next month.
Republicans and Democrats expressed unhappiness with the Bill. Democrats accused Mr Obama of yielding too much ground to the Republicans, setting too high a threshold for tax increases. Republicans claimed the deal failed to address America’s burgeoning deficit.
Conservative House Republican congresswoman Michele Bachmann indicated she would vote against, saying it raised revenue without addressing spending. “It is a cynical, planned move by the president.”
With the Senate adjourned until tomorrow, it appeared possible that Congress could push the country over the fiscal cliff after all, despite months of effort. Republicans could face a backlash if they scuttle the deal.
The proposal that the Senate passed, by 89 votes to eight, is a messy, short-term measure that raises taxes on the wealthiest but postpones for two months consideration of spending cuts.
The vote was, at 2am on New Year’s Day, too late to prevent a technical lurch over the fiscal cliff. Taxes for all Americans automatically increased and federal programmes face deep cuts.
– (Guardian service and agencies)