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."