The Straits Times
Published on Dec 23, 2012

Stop-gap fix most likely outcome of US 'fiscal cliff' talks


WASHINGTON (REUTERS) - The "fiscal cliff" deadline is days away, and the US Congress and President Barack Obama have left town for Christmas.

Even if they were still here, though, it wouldn't have mattered, according to Mr Steny Hoyer, the second-ranking Democrat in the House of Representatives. He said they were going nowhere to resolving the disagreement over how to fix the nation's fiscal problems.

Last month's dreams of a "grand bargain" of tax hikes and spending cuts seem long gone. They had been reduced to more modest bargains in mid-December, and as next year approaches, are on the verge of relegation to a "stop-gap measure", at best the sort of temporary fix that Congress undertook last year.

A stop-gap that puts everything off for a while but resolves nothing is now the most promising alternative, if there is to be one, to the across-the-board tax hikes and spending cuts described as a "fiscal cliff" because they threaten to send the US economy plunging into another recession.