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Obama confident 'fiscal cliff' threat can be avoided

US President Barack Obama has expressed confidence that he and Congress will reach an agreement that will avoid the automatic spending cuts and tax increases scheduled to occur at the end of the year to control the country's budget.

"I am confident we can get our fiscal situation dealt with," Mr Obama said in Bangkok, beginning a three-nation trip that will include the first visit by a US president to Burma.

Before he left for Asia, Mr Obama began a new round of deficit-reduction talks in a bid to avoid the combination of $607bn (€476bn) in automatic tax increases and spending cuts that threatens to throw the US into a recession.

He arrived in Asia yesterday on his first foreign trip since re-election, underscoring the region's importance to the US.

While Mr Obama has repeatedly called for an immediate extension of middle-class tax cuts, he has been less vocal on how Congress should try to avert the spending cuts of the so-called fiscal cliff.

His treasury secretary, Timothy Geithner, said last week that the lack of agreement was "this huge cloud of uncertainty hanging over the economy".

As the peak of holiday shopping season approaches, "You'd want to do it as soon as you can," Mr Geithner said. America celebrates Thanksgiving this week, heralding the start of the Christmas shopping season.

"The uncertainty right now about whether this will be resolved on sensible terms, whether our middle-class families will see their taxes go up, already is having an effect on consumer confidence and the economy," said Mr Geithner.

Irish Independent