With less than 24 hours until nearly 90 percent of American workers face automatic tax rises, talks between US Senate leaders over the so-called fiscal cliff have broken up without agreement.
Tax hikes and stinging public sector cuts – agreed in the summer to reduce the budget deficit – are being renegotiated because of fears they’ll push the US economy back into recession. Last ditch talks will be held later today.
Republicans say they’re still waiting for an answer to proposals they made to Democrats on Saturday.
“There is no single issue that remains an impossible sticking point. The sticking point appears to be a willingness, an interest or frankly the courage to close the deal,” said Republican Mitch McConnell, the Senate Minority Leader.
Few are now confident that an agreement will come in time. As well as tax hikes, the spending cuts will likely see more government workers laid off. Two million long-term unemployed will also lose their benefits, which the Democrats want to avoid.
“We’re willing to make difficult concessions as part of a balanced comprehensive agreement but will not agree to cut social security benefits as part of a small or short-term agreement, especially if that agreement gives more handouts to the rich,” said Harry Reid (D), Senate Majority Leader.