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With hours remaining, hopes rise for stopgap US fiscal deal

Published on Dec 31, 2012 2:23 AM

WASHINGTON (REUTERS) - Hopes rose on Sunday that US lawmakers could reach at least a limited deal to prevent the still-recovering economy from tumbling off a "fiscal cliff"at the New Year, sending the country into another recession.

Aides to Senate Majority Leader Harry Reid, a Democrat, and Senate Republican leader Mitch McConnell worked on a compromise over the weekend to stop automatic tax hikes for most Americans on Jan. 1. Any agreement needs to be rushed through both chambers of Congress before midnight on Monday.

The main focus of negotiations was tax hikes on the wealthy, an increase sought by President Barack Obama but opposed by Republicans, particularly fiscal conservatives in the House of Representatives.

"Well, there are certainly no breakthroughs yet between Senator McConnell and Senator Reid, but there's a real possibility of a deal," Senator Charles Schumer, a Democrat from New York, said on the ABC program "This Week." "I don't disagree with Chuck," said Senator Jon Kyl, a Republican from Arizona.

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