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No progress in US bid to avoid 'fiscal cliff'

US lawmakers have made little progress in the past 10 days toward a compromise to avoid the harsh tax increases and government spending cuts scheduled for January 1, a senior Democratic senator said yesterday.

The US is on course to slash its budget deficit nearly in half next year. Closing the gap that quickly, referred to as going over a "fiscal cliff", could easily trigger a recession.

"Unfortunately, for the last 10 days, with the House and Congress gone for the Thanksgiving recess ... much progress hasn't been made," Dick Durbin, the second top-ranking senate Democrat, told ABC's This Week programme. A deadline is looming. In the absence of action by lawmakers and President Barack Obama, roughly $600bn (€490bn) in tax increases and spending cuts will start to hit households and companies in early January. Republicans and Mr Obama's Democrats are at an impasse over his wish to raise income tax rates on the wealthiest Americans, which Republicans say would hurt job creation. Republicans also want to cut social spending more than Democrats say they will accept. Mr Durbin said Democrats were willing to allow small changes to entitlements.

Irish Independent