lunes, 10 de diciembre de 2012

Barack Obama takes 'fiscal cliff' plan to Michigan

BBC

US President Barack Obama is to address Michigan car workers to build support for his plan to raise taxes on the rich and avert a looming "fiscal cliff".

The visit follows face-to-face meetings with Republican House Speaker John Boehner at the White House on Sunday.

After their first private talks since Mr Obama won re-election, both sides said communication lines "remain open".

Deep spending cuts and tax rises due to take effect on 1 January threaten to derail US economic recovery.

Extended benefits for the long-term unemployed and a temporary cut to payroll taxes are also scheduled to expire at the same time.

International observers, such as Christine Lagarde, head of the International Monetary Fund, have warned that there would be ripple effects for the rest of the world if US lawmakers are not able to agree to a deal.

What is the fiscal cliff?

Under a deal reached last year between President Obama and the Republican-controlled Congress, existing stimulus measures - mostly tax cuts - will expire on 1 January 2013.

Cuts to defence, education and other government spending will then automatically come into force - the "fiscal cliff" - unless Congress acts.

The economy does not have the momentum to absorb the shock from going over the fiscal cliff without going into recession.