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US senate leader voices fiscal cliff fear

Bbc Business
Saturday, December 29, 2012

THE US appears to be heading over the "fiscal cliff", with prospects dim for a deal to avoid tax rises and spending cuts, the Senate majority leader says.

Speaking on the Senate floor, Democrat Harry Reid said there did not seem to be enough time to craft a deal before Monday night's end-of-year deadline.

The president and Senate are back at work, with the House called back for Sunday — one day before the deadline.

Analysts say heading over the "cliff" could tip the US into recession.

President Barack Obama is reported to have spoken to congressional leaders by phone on Wednesday for an update on the progress of talks.

House Majority Leader Eric Cantor said the House might remain in session from Sunday evening until 2 January, but gave no details of planned votes.