US lawmakers signal deep 'fiscal cliff' deadlock
LAST UPDATED: 07/08/2012 23:32
WASHINGTON - US lawmakers signaled on Sunday a worsening deadlock in Congress over how to tackle critical fiscal deadlines looming at year's end, including deciding whether to extend tax cuts for the wealthiest Americans.
A scenario known by economists as the "fiscal cliff" could unfold at the end of the year. Historically low tax rates first enacted under Republican former President George W. Bush in 2001 and 2003 are set to expire at the end of the year if Congress fails to act, as are jobless benefits for the long-term unemployed and a temporary payroll tax cut.
In addition, $1.2 trillion in across-the-board reductions in spending on federal programs would begin to phase in as a result of Congress' failure late last year to find a comprehensive deal to cut the budget deficit.
The United States also is expected to hit the $16.4 trillion statutory limit on its debt sometime between the Nov. 6 US election and the end of the year. If Congress fails to raise it, it would lead to a US default.