Obama Breaks off Vacation to Deal with Fiscal Cliff
President Barack Obama was to cut his holiday short and head back to Washington on Wednesday to try to address the “fiscal cliff,” a set of tax hikes and spending cuts to take effect next year.
Despite weeks of negotiations, Obama has been unable to reach a budget deal with congressional Republicans to slash the deficit and avert the mandatory austerity measures, which could pitch the economy back into recession.
The White House said Tuesday that Obama would fly back from his native Hawaii on Wednesday, cutting short his Christmas break and raising the possibility of renewed negotiations in Washington as early as Thursday.
Democratic and Republican leaders traded blame last week over the failure to reach a deal before the holidays to prevent most Americans from seeing their taxes go up next year.
The so-called fiscal cliff is the result of a poison pill agreement reached earlier this year that would require major spending reductions as tax cuts passed under former president George W. Bush expire at the end of the year — should Democrats and Republicans fail to reach a deal to cut the deficit.