As the March 1 deadline draws closer for automatic austerity measures to be imposed on the US government, President Barack Obama has urged Congress to pass a smaller package of reforms.
Democrats say his plan will avoid a new fiscal cliff and prevent the American economy from returning to recession.
But Republicans have quickly rebuffed his proposals, saying further spending cuts, rather than tax increases were needed.
Obama says the uncertainty over a budget deal threatened to stunt economic growth further.
“Our economy right now is headed in the right direction. And it will stay that way, as long as there aren’t any more self-inflicted wounds coming out of Washington.
So let’s keep on chipping away at this problem together, as Democrats and Republicans, to give our workers and our businesses the support that they need to thrive in the weeks and months ahead.”
American politicians delayed across-the-board cuts for a few months at the start of the year, allowing more time for negotiations.
While both sides agree that America’s vast budget deficit needs to be trimmed, they still can’t agree on how.