The Star Online: World Updates
The Star Online: World Updates |
- With final vote, U.S. Congress resolves "fiscal cliff" drama
- Venezuela's Chavez aware his condition complicated - Vice President
- U.S. "fiscal cliff" crisis heads to resolution in Congress
| With final vote, U.S. Congress resolves "fiscal cliff" drama Posted: 01 Jan 2013 08:13 PM PST WASHINGTON (Reuters) - The U.S. Congress approved a rare tax increase on Tuesday that will hit the nation's wealthiest households in a bipartisan budget deal that stops the world's largest economy from falling into a deep fiscal crisis and recession.
By a vote of 257 to 167, the Republican-controlled House of Representatives approved a bill that fulfils President Barack Obama's re-election promise to raise taxes on top earners. The Senate passed the measure earlier in a rare New Year's Day session and Obama is expected to sign it into law shortly. The United States will no longer go over a "fiscal cliff" of tax hikes and spending cuts that had been due to come into force on Tuesday but other bruising budget battles lie ahead in the next two months. It was a reversal for House Republicans, who were in disarray despite winning deep spending cuts in earlier budget fights. But they saw their leverage slip away this time when they were unable to unite behind any alternative to Obama's proposal. House Speaker John Boehner and other Republican House leaders stayed silent during the debate on the House floor, an unusual move for a major vote. The deal shatters two decades of Republican anti-tax orthodoxy by raising rates on the wealthiest even as it makes cuts for everybody else permanent. Lawmakers had struggled to find a way to head off across-the-board tax hikes and spending cuts worth $600 billion (367.1 billion pounds) that began to take effect at midnight on January 1, a legacy of earlier failed budget deals that is known as the fiscal cliff. Strictly speaking, the United States went over the cliff in the first minutes of the New Year because Congress failed to act on time. But the bill passed on Tuesday will be backdated. While many Republicans were uneasy with the tax hikes and wanted more spending cuts, they seemed to realize that the fiscal cliff would begin to damage the economy once financial markets and federal government offices returned to work on Wednesday. Opinion polls show the public would blame Republicans if a deal were to fall apart. Income tax rates will now rise on families earning more than $450,000 per year and the amount of deductions they can take to lower their tax bill will be limited. Low temporary rates that have been in place for the past decade will be made permanent for less-affluent taxpayers, along with a range of targeted tax breaks put in place to fight the 2009 economic downturn. However, workers will see up to $2,000 more taken out of their paychecks annually with the expiration of a temporary payroll tax cut. The non-partisan Congressional Budget Office said the bill would increase budget deficits by nearly $4 trillion over the coming 10 years, compared to the budget savings that would occur if the extreme measures of the cliff were to kick in. But the bill would actually save $650 billion during that time period when measured against the tax and spending policies that were in effect on Monday, according to the Committee for a Responsible Federal Budget, an independent group that has pushed for more aggressive deficit savings. (Additional reporting by Rachelle Younglai, Kim Dixon and David Lawder; Writing by Andy Sullivan; Editing by Alistair Bell and Eric Beech)
Copyright © 2013 Reuters | ||
| Venezuela's Chavez aware his condition complicated - Vice President Posted: 01 Jan 2013 07:10 PM PST CARACAS (Reuters) - Venezuelan President Hugo Chavez is aware that his condition is complicated following a fourth cancer operation in Cuba, Vice President Nicolas Maduro said on Tuesday, as the OPEC nation watches for clues to the socialist leader's health.
Maduro said he was returning to Venezuela after spending several days alongside Chavez and members of the president's family. That may help squelch rumours his visit was a sign that the former soldier was near death. "During these days I was able to see him twice and speak with him," Maduro said during an interview from Havana with regional television network Telesur. "He is completely conscious of the complexity of his post-operative state and he expressly asked us keep the people informed." Maduro, who Chavez last month designated as his successor, said the president had grasped his hand "with immense strength" as they spoke, and asked him about the state of the economy and the swearing-in of newly elected governors. "After staying in Havana to accompany the family members, we are returning to Caracas tomorrow (January 2) to continue our work," said Maduro, who visited Chavez with his wife, Attorney General Cilia Flores. The president suffered unexpected bleeding as result of the complex, six-hour operation on his pelvic region December 11, and later had to fight off a respiratory infection. On Sunday, Maduro had said the 58-year-old Chavez was suffering a third set of complications as a result of the respiratory problem. Chavez's son-in-law, who also serves as science minister, on Monday said the president was in stable condition and urged Venezuelans to ignore rumours of his impending death. Chavez has never said what type of cancer he has. His death or resignation due to illness would roil politics in Venezuela, where his personalized brand of oil-financed socialism has made him a hero to the poor majority but a nemesis to critics who call him a dictator. If Chavez stepped down, new elections would be called within 30 days. Maduro would be the ruling Socialist Party candidate. Chavez's condition is also being watched closely by Latin American countries that have benefited from his generous assistance, as well as Wall Street investors who are drawn to Venezuela's lucrative and heavily traded bonds. He is due to be sworn in again in Venezuela on January 10 after winning re-election in October. But Socialist Party officials have suggested the ceremony could be delayed if he were unable to return in time. Opposition leaders say postponing it would show Chavez is not fit to govern and that new elections should be held to choose his replacement. (Writing by Brian Ellsworth; Editing by Eric Walsh) Copyright © 2013 Reuters | ||
| U.S. "fiscal cliff" crisis heads to resolution in Congress Posted: 01 Jan 2013 07:00 PM PST WASHINGTON (Reuters) - A months-long battle over the U.S. "fiscal cliff" headed to a close on Tuesday as the House of Representatives moved toward final approval of a bipartisan deal meant to prevent Washington from pushing the world's biggest economy into recession. The Republican-controlled House was expected to back a tax hike on the top U.S. earners shortly before midnight on Tuesday, ending weeks of high-stakes budget brinkmanship that threatened to spook consumers and throw financial markets into turmoil.
Approval of the bill would be a victory for President Barack Obama, who campaigned for re-election last November on a promise to raise taxes on the wealthiest but faced stiff opposition from congressional Republicans. Republicans had earlier considered adding hundreds of billions of dollars in spending cuts after the bill had already passed the Senate with strong bipartisan support. That would have triggered further partisan warfare and pushed the crisis well past a self-imposed January 1 deadline. But party leaders abandoned the effort after determining they lacked the votes. "We've gone as far as we can go and I think people are ready to bring it to a conclusion," Republican Representative Jack Kingston of Georgia said. "We fought the fight." Rules Committee Chairman David Dreier, a Republican, predicted the House would back the Senate bill, which also postpones for two months $109 billion (66.6 billion pounds) in spending cuts on military and domestic programs set for 2013. The bill easily cleared a procedural hurdle by a bipartisan vote of 408 to 10. Lawmakers have struggled to find a way to head off across-the-board tax hikes and spending cuts that began to take effect at midnight, a legacy of earlier failed budget deals that is known as the fiscal cliff. Strictly speaking, the United States went over the cliff in the first minutes of the New Year because Congress failed to produce legislation to halt $600 billion of tax hikes and spending cuts scheduled for this year. TAX HIKES FOR WEALTHIEST While many Republicans were uneasy with the tax hikes and wanted more spending cuts in the bill, they seemed to realize that the fiscal cliff would begin to damage the economy once financial markets and federal government offices returned to work on Wednesday. Opinion polls show the public would blame Republicans if a deal were to fall apart. House Republicans had earlier considered adding $330 billion in spending cuts over 10 years to the Senate bill, which raises taxes on the wealthiest U.S. households by $620 billion over the same period. But Senate Democrats refused to consider any changes to their bill, which passed 89 to 8 in a rare display of unity early Tuesday. That measure, which passed the Senate at around 2 a.m., would raise income taxes on families earning more than $450,000 per year and limit the amount of deductions they can take to lower their tax bill. Low temporary rates that have been in place for the past decade would be made permanent for less-affluent taxpayers, along with a range of targeted tax breaks put in place to fight the 2009 economic downturn. However, workers would see up to $2,000 more taken out of their pay checks annually with the expiration of a temporary payroll tax cut. The non-partisan Congressional Budget Office said the Senate bill would increase budget deficits by nearly $4 trillion over the coming 10 years, compared to the budget savings that would occur if the extreme measures of the cliff were to kick in. But the bill would actually save $650 billion during that time period when measured against the tax and spending policies that were in effect on Monday, according to the Committee for a Responsible Federal Budget, an independent group that has pushed for more aggressive deficit savings. (Additional reporting by Rachelle Younglai, Thomas Ferraro and David Lawder; Writing by Andy Sullivan; Editing by Alistair Bell and Eric Beech)
Copyright © 2013 Reuters |
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