US Congress in final push to reach ‘fiscal cliff’ deal

US Congressional leaders have one more day to stop steep tax rises and spending cuts, known as the “fiscal cliff”, after talks ended with no deal.Senators will continue to seek a compromise deal on Monday to send to the House of Representatives.Failure to reach agreement by 1 January could push the US back into recession.President Barack Obama has blamed Republicans for the deadlock. He said their “overriding theme” was protecting tax breaks for the rich.Few in the US capital could talk of anything but who would win Sunday’s must-win showdown. For most, that meant an NFL game between the Washington Redskins and the Dallas Cowboys; on Capitol Hill the stakes were somewhat higher. Cliches and aphorisms abounded in the Senate corridors as reports spread of a breakdown in deal-making. “The fat lady hasn’t sung yet,” one Republican declared, obscured by the pack of reporters following him down the hallway. “These things always happen at the end,” said Chuck Schumer, a senior Democrat.But it was the retiring senators, three days away from their final goodbyes, who spoke the most openly. Failure would “send a message worldwide that we don’t have the capacity to work across political aisles on critical issues”, said Olympia Snowe, Maine’s outgoing Republican. “The world has gotten used to this so they are no longer shocked,” Ben Nelson, a retiring Nebraska Democrat said. “They see this as just more of the same and hope that one of these days maybe Congress will get its act together.”Republicans and Democrats have been fighting for months over how to deal with the combination of automatic spending cuts and the expiration of Bush-era tax reductions at the new year.Without an agreement, higher taxes will rise for virtually every working American and across-the-board cuts in government spending will kick in from Tuesday.Analysts say this could significantly reduce consumer spending, leading the US economy to fall off the “fiscal cliff”. After the latest round of intense negotiations in the Senate on Sunday the main sticking points reportedly include such key issues as the income threshold for higher tax rates and inheritance taxes.