Congress, Tax Hikes | featured news

Federal Reserve Chairman Ben Bernanke on Tuesday urged Congress and the Obama administration to strike a budget deal to avert tax increases and spending cuts that could trigger a recession next year.

The outline of a compromise over upcoming federal tax hikes and spending cuts began to come into focus Friday after President Obama convened congressional leaders at the White House.

Congressional leaders of both parties will meet with the president in an effort to reach a deal to avoid across-the-board tax increases and spending cuts that could push the economy into recession.

...In his first full-scale news conference since March, Obama said he was willing to compromise with Republicans to forge a deal on the nation's debt and taxes to avoid the "fiscal cliff," a combination of budget cuts and tax increases that will kick in next year if such an agreement is not reached.

Fifty-three percent of Americans said Republicans in Congress would be more to blame if the government could not reach an agreement to avoid the combination of spending cuts and tax hikes set to take effect at the beginning of the year.

Amid a global fright over Washington's political brinkmanship, U.S. lawmakers return to the capital on Tuesday with a seven-week deadline to reach agreement on scheduled tax hikes and budget cuts that threaten to trigger another recession.

Flush with re-election vigor, President Barack Obama on Friday will provide his first public comments on the upcoming negotiations with Congress on how to deal with pending tax hikes and spending cuts that create the so-called fiscal cliff facing the economy at the end of the year.

The game of chicken over the nation's impending "fiscal cliff" — the automatic tax increases and spending cuts due if Congress fails to act by year-end — has officially begun. Congressional Democratic leaders made clear Monday that they had no interest in averting the bleak scenario if Republicans continued to refuse to soften their hard-line opposition to higher taxes on wealthier Americans.

President Obama's aides are seeking to pressure House Republicans in the hours leading up to a vote tonight on a two-month extension of the payroll tax cut, saying an adverse decision will subject nearly 160 million Americans to a tax hike next year.

Republican and Democratic lawmakers are locked in an end-of-year fight that threatens a government shutdown, an effective tax hike for 160 million Americans and the loss of benefits for millions of unemployed.