Treasury Secretary Timothy Geithner has been
charged by the White House with leading negotiations with Congress to
avert the looming mix of sharp austerity measures known as the fiscal
cliff, The Wall Street Journal reported Monday.
US President Barack Obama spoke over the weekend with Senate
majority leader Harry Reid, a fellow Democrat, and Republican Speaker
of the House John Boehner, White House spokesman Jay Carney said.
"We remain confident that we can achieve an agreement. Work has to
be done. Work is continuing to take place," he said with just weeks
remaining until the looming deadline.
Unless Republicans and Democrats agree on an alternative, the
economy will be hit by a 600-billion-dollar double whammy of budget
cuts and tax increases starting January 1.
The White House released a report Monday timed to coincide with
the start of the holiday shopping season, saying fears about tax
hikes could cause US consumers to spend some 200 billion dollars less
in 2013, taking a bite of 1.7 percentage points out of projected
consumer spending.
The biggest sticking point is Democratic insistence that the
highest earners face higher marginal income tax rates, while middle
and lower-income earners should continue to benefit from Bush-era tax
cuts. Republicans want to keep the tax cuts across the board.
Another conflict point is Republican insistence that government
entitlement programmes, such as Social Security and medical insurance
for the poor and elderly, be reformed, which left-leaning Democrats
have opposed.
