News Column

Reid: US to Fall Off Fiscal Cliff Unless GOP Acts

Dec. 27, 2012
Sen. Harry Reid
Sen. Harry Reid

The top Democrat in the US Senate predicted Thursday that no deal will be reached before year's end to avert the harsh fiscal measures known as the fiscal cliff.

Hope seemed to be fading for an agreement to replace the steep spending cuts and tax hikes that threaten to derail the US economy with a more gradual deficit reduction package.

Senate Majority Leader Harry Reid said "it looks like" the US would head off the fiscal cliff next week.

He pointed the finger at Republicans who control the lower chamber of Congress, noting they remained on Christmas vacation even as the Senate and President Barack Obama returned to work Thursday.

"If we go over the cliff, we'll be left with the knowledge that it could have been prevented with a single vote in a Republican controlled House of Representatives," Reid said on the Senate floor.

A bill already passed in the Democratic-controlled Senate would raise taxes on those making more than 250,000 dollars a year rather than allowing all tax cuts to expire.

Reid called on House Republicans to vote on that measure, despite Republican opposition to new taxes. Obama and his Democrats who want to raise taxes on the wealthy.

Last week, House Speaker John Boehner proposed raising taxes for those earning more than 1 million dollars per year but failed to garner support within his own party.

"It's not too late for the speaker to take up the Senate-passed bill but time on that is winding down," Reid said.

Obama returned to Washington Thursday after cutting short his Christmas vacation in Hawaii for an intense round of talks to avoid the severe austerity measures due to kick in at year's end.

The fiscal cliff refers to the expiration of all tax cuts implemented under former president George W Bush coupled with across-the-board spending cuts by the government.

Approved in August 2011 during a partisan standoff on raising the debt ceiling, it was designed to force both sides to reach agreement on deficit reduction measures.

If it were to take effect, government economists say the economy would suffer a 600-billion-dollar blow in 2013 and be pushed back into recession.

Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH