Monday, December 3, 2012 | Latest audio lessons → VOA Learning English
Seeking a Solution to the 'Fiscal Cliff'
President Obama had little time to celebrate his re-election in early November. He now turns his attention to negotiations with congressional leaders. By law, the United States faces a combination of big spending cuts and tax increases next year to deal with its budget deficits.
Together, these measures are being called a "fiscal cliff." And economists say they could push the country back into a recession. The Congressional Budget Office says that, if current policies continue, they will place the budget on an unsustainable path. But, the CBO warned that deep cuts could hurt economic growth. That would reduce federal revenue from taxes.
Democrats and Republicans are trying to reach a deal on deficit reductions valued at over $600 billion. Those policies are to take effect on January first, 2013. They will happen, unless the two main parties can reach agreement. The cuts would affect both the military spending that the Republican Party wants and the social programs supported by President Obama and his Democratic Party.
The Democrats control the United States Senate, while Republicans hold a majority in the House of Representatives. One issue is whether to extend tax-rate reductions that have been in place for years. Those tax cuts are set to disappear at the end of this year. The reduced tax rates apply to all Americans, whatever they earn.
Republican lawmakers say they continue to support all of the lower tax rates. But President Obama and Democratic Party leaders have been seeking to end the tax cuts for the wealthiest taxpayers. Both sides have signaled a willingness to compromise. But without agreement, painful budget measures are sure to take effect.
For VOA Learning English, I'm Mario Ritter.(Adapted from a radio program broadcast 16Nov2012)