US poised to miss 'fiscal cliff' deadline, says senate leader
The top Democrat in the Senate warned today that the United States looks to be headed over the "fiscal cliff" of tax hikes and spending cuts that will start next week if squabbling politicians do not reach a deal.
Majority leader Harry Reid told the Senate in a speech that "it looks like that is where we're headed." He called on the Republicans who control the House of Representatives to prevent the worst of the fiscal shock by getting behind a Senate bill to extend existing tax cuts for all except those households earning more than $250,000 a year.
With the House not in session and the clock ticking toward the scheduled January start of tax increases and deep, automatic government spending cuts, Mr Reid offered little hope.
"I don't know time-wise how it can happen now," he said.
Referring to the House run by speaker John Boehner - the top Republican in Congress - Mr Reid said, "It's being operated with a dictatorship of the speaker, not allowing a vast majority of the House of Representatives to get what they want."
Mr Boehner's failed effort last week to push his own "fiscal cliff" solution through the House was a "debacle," Mr Reid added. He also accused Mr Boehner of delaying "fiscal cliff" action until after he seeks re-election as House speaker on January 3rd.
"John Boehner seems to care more about keeping his speakership than about keeping the nation on firm financial footing," Mr Reid added. Mr Reid's pessimistic remarks sent world stocks, the euro and US shares lower.
But Mr Reid's comments may have been more an attempt to spur Republican rivals into action than a definitive prediction that "fiscal cliff" talks will fail.
President Barack Obama arrived back at the White House from his brief vacation in Hawaii to try to restart stalled negotiations with Congress.
Mr Obama made phone calls to congressional leaders from both parties on Wednesday from Hawaii to try to revive the stalled talks to prevent the "fiscal cliff" scenario, which would worry world financial markets and could push the United States back into recession.
In addition, consumer confidence fell to a four-month low in December as the budget crisis sapped what had been a growing sense of optimism about the economy, a report released today showed.
"People are hearing about (the cliff) and it negatively impacts confidence and investor sentiment and even holiday sales," said Todd Schoenberger, managing partner at Landcolt Capital in New York.
The chances of a last-minute deal - at least one that would prevent tax hikes - remained uncertain, with Republicans and Democrats each insisting the other side move first amid continuing partisan gridlock. The Senate, controlled by Democrats, was scheduled to meet later on Thursday but on matters unrelated to the "fiscal cliff." R