U.S. President Barack Obama is meeting at the White House with top congressional leaders, in a bid to avert the “fiscal cliff” of automatic tax hikes and federal spending cuts.
The president called the meeting with the leadership in the House and Senate days before the changes are set to begin January 1.
If there is no deal, Americans will see taxes go up, while automatic government spending cuts go into effect. Economists fear this could plunge the fragile economy back into recession.
Mr. Obama is holding the talks Friday with the Republican and Democratic leaders in the Senate — Mitch McConnell and Harry Reid respectively — and House Speaker John Boehner and Democratic House Minority Leader Nancy Pelosi.
Congressional Republican leaders have called the House back into session this Sunday evening. The House had adjourned last week after failing to agree on a fiscal cliff deal with the White House.
The Senate, however, kept working. Reid on Thursday said it looks like the economy will go over the cliff. He accused Boehner of running a dictatorship and being more concerned with saving his leadership position.
Boehner shot back, saying Reid should talk less and legislate more. He said Senate Democrats have refused to pass a long-term deficit reduction package that would stop the economy from going over the cliff.
Boehner has also blamed President Obama for what he says is the president's unwillingness to cut spending.
President Obama has insisted that raising taxes on wealthy Americans along with some spending cuts is the only practical way to cut the country's huge deficit. Conservative Republicans do not want anyone's taxes to go up. They rejected Boehner's alternative plan to raise taxes only on Americans making at least $1 million per year. The president's offer would let taxes go up for those making at least $400,000.
U.S. Treasury Secretary Timothy Geithner says the nation's debt ceiling will reach its $16.4 trillion limit Monday, New Year's Eve. The ceiling is a limit on how much money the government can borrow to avoid defaulting on its debt. Geithner says Treasury officials will take what he calls “extraordinary measures” under the law to avoid default.