Fiscal cliff talks adjourned until December 27

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FXstreet.com (Barcelona) - Negotiations between the Democrats and the Republicans on deficit-cutting measures aimed at avoiding the so-called fiscal cliff fell apart last Friday, after House Speaker John Boehner failed to bring his "Plan B" bill to a vote. US lawmakers have now just one week left to reach an agreement; otherwise a combination of automatic tax increases and spending cuts will be triggered on January 1.

If the Democrats and the Republicans manage to strike a deal on time, it will not only help to avert the fiscal cliff but will also prevent the Fitch rating agency from carrying out its threat, articulated last Wednesday, of cutting the US rating.

President Barack Obama's offer consists of raising 1.2 trillion dollars in revenue through taxing households with an income exceeding 400.000 dollars per year. His plan includes 400 billion dollars in health care savings.

After twenty-one House of Representatives members rejected on Friday Boehner's "Plan B", anticipating higher taxes for people earning more than 1 million dollars annually, the negotiations disintegrated and the were finally adjourned until after Christmas.

"What the president has offered so far simply won't do anything to solve our spending problem and begin to address our nation's crippling debt," John Boehner said on Friday, "The House has done its part to avert this entire fiscal cliff. ... The events of the past week make it clearer than ever that these measures reflect the will of the House."



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