Washington D.C., MD – President Obama has told reporters at a White House press conference that a deal to resolve the fiscal cliff crisis is close to being reached.
Speaking Monday, just hours before a midnight deadline would cause automatic tax rises and spending cuts to kick in, Obama described an agreement as being “within sight,” with discussions still ongoing. Should no deal be reached by midnight, every taxpayer in America would face steep tax rises from Tuesday, and a range of federal spending programmes would also suffer deep cuts. Obama told journalists:
“Today it appears that an agreement to prevent this New Year’s Eve hike is within sight, but it is not done. There are still issues left to resolve but we are hopeful that Congress can get it done. But it is not done.”
Obama went on to explain how Americans could not afford the proposed tax rises, which would equate to an average of about $2,000 for every US taxpayer. According to the president, “The economy can’t afford it.”
Speaking about the deal currently being discussed, Obama said it would ensure tax would not go up for most Americans. Unemployment benefits, tax credits for clean energy companies, and assistance with university tuition would all be protected.
Meanwhile, tax rises would only apply to individuals earning $450,000 a year or more. Republican negotiators had wanted the limit set at those earning $1m or more, while the Democrats had been pushing for $250,000.
Talking about the negotiations, Obama conceded that he would have preferred a bigger deal, but said both sides in the talks were still too divided on certain aspects to achieve what he described as a “grand bargain.”
Harry Reid, the Democratic leader in the Senate, said Democrats remained determined to shield working-class families from tax rises:
“There are a number of issues on which the two sides are still apart but negotiations are continuing as I speak. We really are running out of time. Americans are still threatened with tax hike in just a few hours.”
Should a deal be struck, legislation will have to be hurried through the House and the Senate before Wall Street reopens on Wednesday. While the Senate should pose no problem – the Democrats hold a strong majority there – the Republican-controlled House may be more difficult, with Obama relying on Democrats and moderate Republicans to push the agreement through.