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US House considers deal on fiscal cliff
2013-01-01 01:58:40

The Nation Press -

A US Senate-backed deal to stave off a "fiscal cliff" of drastic taxation and spending measures has passed to the House of Representatives.

President Barack Obama has urged the House to pass the bill "without delay".

However, after holding a meeting, House Republicans expressed serious concerns, saying the mood was to amend the Senate bill to add more spending cuts.

There is intense pressure for a vote in the House before financial markets reopen on Wednesday.

But participants at the Republicans' meeting said the overwhelming sentiment was a desire to amend the bill and return it to the Senate.

'Cannot wait'
The Republican majority leader, Eric Cantor, said after the meeting: "I do not support the bill."

Brendan Buck, a spokesman for the speaker of the Republican-led House, John Boehner, said: "The lack of spending cuts in the Senate bill was a universal concern amongst members in today's meeting."

Representative Spencer Bachus said: "I'd be shocked if this does not go back to the Senate."

After a meeting of the House Democrats, Minority Leader Nancy Pelosi urged Mr Boehner to allow the House to vote on the deal.

"That is what we expect. That is what the American people deserve," Ms Pelosi said.

Democrat representative Steve Cohen said: "My district cannot afford to wait a few days and have the stock market go down 300 points tomorrow if we don't get together and do something."

The current Congress is also scheduled to expire on Thursday. If the House rejects the bill, a new House would have to start all over again.

The "fiscal cliff" measures - cutting spending and increasing taxes dramatically - came into effect at midnight on Monday when George W Bush-era tax cuts expired.

The 1 January deadline triggered tax increases of about $536bn and spending cuts of $109bn from domestic and military programmes.

Few effects were felt immediately, as Tuesday is a public holiday. But economists warn that if the full effects of the fiscal cliff are allowed to take hold, the resulting reduction in consumer spending could spark a new recession.

The Senate-backed bill, which raises taxes for the wealthy, was passed in the early hours of Tuesday by 89 votes to eight after lengthy talks between Vice-President Joe Biden and Senate Republicans.

Spending cuts have been delayed for two months to allow a wider agreement.

In hailing the Senate vote, President Obama had stressed the urgency of a House approval.

He said in a statement: "While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay."

The compromise Senate deal reached on Monday extends the tax cuts for Americans earning under $400,000 (£246,000) - up from the $250,000 level Democrats had originally sought.

In addition to the income tax rates and spending cuts, the package includes:

Rises in inheritance taxes from 35% to 40% after the first $5m for an individual and $10m for a couple
Rises in capital taxes - affecting some investment income - of up to 20%, but less than the 39.6% that would prevail without a deal
One-year extension for unemployment benefits, affecting two million people
Five-year extension for tax credits that help poorer and middle-class families

Source : Thenation press servecis
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