US President Barack Obama had cut short his Christmas holiday in Hawaii to resume talks in Washington over how to avoid the ‘fiscal cliff’.
If a compromise is not found, tax increases and huge spending cuts will come into force from the 1st January, threatening to pull the US back into recession.
Despite this end of year deadline fast approaching, talks between the White House and republicans appear nowhere near a solution.
Republican House of Representatives Speaker John Boehner has asked the Democrat-controlled Senate to pass its own legislation on avoiding the cliff, with the US Treasury announcing what they have labelled ‘extraordinary measures’ to prevent it hitting a legal limit on its borrowing.
The corridors of congress are silent for now, but analysts remain hopeful that a short-term deal may be agreed that will postpone the potentially devastating cuts until spring.
Written and presented by Alfred Joyner