1 Dec 2012

Fiscal cliff negotiations going nowhere

11:20 am on 1 December 2012

Negotiations over a looming fiscal crisis appear to be faltering in the United States.

House Speaker John Boehner (Republican) said no major progress has been made on a deal to prevent the US tipping into recession when a combination of mandatory tax rises and spending cuts comes into force on 1 January.

Mr Boehner said on Friday that talks with the White House had gone "almost nowhere".

He said a plan by President Barack Obama to raise $US1.6 trillion in revenue over 10 years was not a "serious proposal".

The BBC reports Mr Obama favours extending a tax break for households earning below $US250,000. But he wants taxes to rise for those on income above that sum.

Mr Boehner said that asking the top 2% of US taxpayers to pay more would deal a "crippling blow" to a fragile economy.

He was also critical of cuts that were proposed on Thursday by the administration as inadequate spending.

Treasury Secretary Timothy Geithner put forward a plan that would raise $US1.6 trillion in higher taxes over a decade.

The BBC reports the proposal envisages spending more money to help the unemployed and struggling homeowners. And it called for savings of as much as $US400 billion from Medicare and other benefit programmes over 10 years.

Mr Boehner told reporters on Friday: "There's a stalemate. Let's not kid ourselves. Right now, we're almost nowhere."