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'Serious differences' in US fiscal stand-off

Published on Dec 13, 2012 6:06 AM
This Nov 16, 2012 file photo shows President Barack Obama, accompanied by House Speaker John Boehner of Ohio, speaking to reporters in the Roosevelt Room of the White House in Washington. Even if Congress and the White House fail to strike a budget deal by New Year's Day, reality may be a lot less bleak then the scenario that's been spooking employers and investors and slowing the U.S. Economy. The tax increases and spending cuts could be retroactively repealed after Jan. -- PHOTO : AP

WASHINGTON (AFP) - The United States (US) economy was lurching towards the disaster of the looming "fiscal cliff" on Wednesday as President Barack Obama's Republican opponents warned a budget deal was still far off.

The newly re-elected White House chief is locked in a stand-off with lawmakers over how to prevent the onset of a toxic package of tax hikes and spending cuts from kicking in at the end of the year.

With sand slipping through the hourglass, Federal Reserve chairman Ben Bernanke said Mr Obama and lawmakers risked washing out recent economic gains and called on them to "come together" to reach a deal.

"Clearly the fiscal cliff is having effects on the economy" by creating uncertainty or pessimism in the business community, Mr Bernanke told journalists after a Fed policy board meeting.

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