Fiscal Cliff | featured news

Democrats and Republicans say signs of progress are emerging in urgent negotiations to avert the looming `fiscal cliff' ahead of a midnight deadline.

Just before a self-imposed deadline at which Senate leaders were set to brief their respective caucuses about a prospective deal, negotiations toward a scaled-back agreement to avoid the onset of automatic tax hikes and spending cuts on Jan. 1 appeared on the verge of breakdown.

Financial markets would be affected adversely if U.S. lawmakers fail to agree on a "fiscal cliff" deal before Tuesday, President Barack Obama said in an interview broadcast on Sunday, while urging Congress to act quickly to extend tax cuts for middle-class Americans.

Investors fearing a stock market plunge if the U.S. tumbles off the "fiscal cliff" next week may want to relax.

Investors, gradually coming to believe that policy makers will fail to reach a meaningful agreement to avert the so-called fiscal cliff before a year-end deadline, dumped stocks Friday in a selloff that put the blue-chip index into the red for the month.

The markets are already fretting over the "fiscal cliff": On Thursday, the Dow seemed to surge and fall with every bit of micro-news about a deal or lack thereof, as Joe Weisenthal documented.

Congressional leaders prepared for a meeting at the White House on Friday as top aides said lawmakers were pursuing a proposal that would prevent tax increases on income of $400,000 or below.

This is the second of three posts looking at how the U.S. economy will do in 2013. Wednesday's installment examined the positive fundamentals that should drive a good year. Today's considers the political risks that could undermine those fundamentals. Friday's will look at international risks to the outlook.

U.S. consumer confidence tumbled in December, driven lower by fears of sharp tax increases and government spending cuts set to take effect next week.

Lawmakers are engaged in a playground game of 'who goes first,' daring each political party to let the year end without resolving a Jan. 1 confluence of higher taxes and deep spending cuts that could rattle a recovering, but-still-fragile economy.