The Economy & The Fiscal Cliff
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Latest Points:
• U.S. stocks increase in first day of 2013 trading following "cliff" deal
• With "cliff" deal reached, House members turn attention to Sandy bill
• Despite deal reached, budget fights anticipated over next coming months
• LIVE COVERAGE: Latest political news from Reuters
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Asia holds breath as U.S. fiscal talks go to the wire
Markets were eerily quiet in Asia as trade resumed on Wednesday with investors anxiously waiting to see if the U.S. Congress could strike a last-minute deal to avoid triggering tax rises and spending cuts that could threaten the global economy.
The U.S. Senate early on Tuesday passed a bill that aims to avoid the "fiscal cliff" of $600 billion in automatic spending cuts and tax increases.
However, the package immediately ran into opposition from House Republicans, who were meeting to decide whether to reject or amend the bill .
"Frankly, we don't know what to make of it all. It's like a circus there," said one exasperated forex dealer at an Australian bank in Sydney.
"The markets have always assumed they would eventually strike a deal that would avoid the worst affects of the fiscal cliff, but it's getting harder and harder to stay optimistic."
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US House Republicans aim to bring up Senate 'fiscal cliff' bill if option fails: aide
U.S. House Republican leaders may bring the Senate-passed "fiscal cliff" bill up for a vote if they determine they do not have enough support to amend it, a senior aide said on Tuesday.
The aide said Republican leaders were trying to determine if they could muster the needed 218 votes from their 241 members. If they fall short, the goal is to bring up the Senate-passed bill for a vote as "soon as possible," the aide said. -
House Republicans seek $330 billion in spending cuts in fiscal cliff amendment
Republicans in the U.S. House of Representatives are looking to add an amendment to the Senate-passed "fiscal cliff" legislation that would cut spending by $330 billion, Republican Representative Darrell Issa said on Tuesday.
Republicans are now weighing whether they will be able to get enough votes to pass such an amendment. If not, they will hold an up-or-down vote on the Senate-passed measure, a Republican aide said. -
High level #GOP aide tells me House in till 2am "probably going to happen." #fiscalcliff
— Luke Russert (@LukeRussert) January 1, 2013 -
Buzz among House GOP is that Boehner is getting what he needs on the floor right now. Not everything. Not perfect. But no total revolt.
— Robert Costa (@robertcostaNRO) January 2, 2013 -
Rep. Nugent says Boehner told members that if amendment didn't get 218 votes, he would personally vote yes on unamended Senate bill
— Russell Berman (@russellberman) January 2, 2013 -
House GOP leadership aide now tells me 9:30pm is best guess as when vote commences
— Chuck Todd (@chucktodd) January 2, 2013 -
Rules announces they will meet on the clean Senate bill, with NO amendments. #fiscalcliff
— Frank Thorp V (@frankthorpNBC) January 2, 2013 -
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US House preparing to vote on Senate 'fiscal cliff' bill: Democrat Hastings
The U.S. House of Representatives is preparing to vote on the Senate's "fiscal cliff" bill, Democratic Representative Alcee Hastings said on Tuesday, increasing the odds that Congress will stave off steep tax hikes and spending cuts.
Hastings, a member of the House Rules Committee, said the panel was working out the procedure for voting on the Senate bill that raises taxes on families earning over $450,000 a year.
House Republicans had considered changing the Senate bill to add new spending cuts. But Republicans did not have enough support from their party to amend the bill, Hastings said. -
Top House Republican predicts final passage of 'fiscal cliff' bill
A senior Republican in the U.S. House of Representatives said he expected the chamber to give final approval on Tuesday night to the Senate-passed "fiscal cliff" bill.
Rules Committee Chairman David Dreier made the prediction in a brief interview with Reuters after his panel cleared the way for the measure to be brought to the House floor. Dreier said he expected it to pass with bipartisan support, but declined to guess how many Republicans would back it, other than to say, "Quite a few." -
President Obama will likely deliver remarks after the house votes on the fiscal cliff bill.
— Dan Lopez (@4danlopez) January 2, 2013 -
House now voting on debate rule for the Senate-passed fiscal cliff bill. Once approved, House begins hour debate on that, no amendments.
— Mark Knoller (@markknoller) January 2, 2013 -
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U.S. 'fiscal cliff' bill sails through House test vote
A bill to avert the U.S. "fiscal cliff" by canceling most scheduled tax hikes and delaying spending cuts cleared a procedural vote in the U.S. House of Representatives by an overwhelming margin, indicating strong support for final passage in a vote expected later on Tuesday.
The House voted 408-10 to approve a rule allowing for consideration of the fiscal cliff bill that was passed by the Senate early on Tuesday. -
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House now expected to begin voting on the #fiscalcliff bill between 10:30-10:45 p.m., according to #GOP aides.
— Ed O'Keefe (@edatpost) January 2, 2013 -
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U.S. House approves legislation averting 'fiscal cliff'
The U.S. House of Representatives voted on Tuesday to avert the U.S. "fiscal cliff," sparing most Americans from tax hikes and spending cuts that had threatened to plunge the U.S. economy into recession in 2013.
The measure now moves to President Barack Obama's desk for his signature, which is expected to come quickly. The 257-167 vote, which relied heavily on Democratic votes to win passage, ended hard-fought negotiations over tax rates but leaves many budget issues unresolved before another fiscal deadline in about two months - the need to raise the federal borrowing limit. -
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With final vote, Congress resolves "fiscal cliff" drama
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 fulfills 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.
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Wall Street starts 2013 with a rally on "fiscal cliff" agreement
Stocks soared on the first day of trading in 2013, after Washington lawmakers cut a last-minute deal to avoid automatic tax hikes that threatened to pinch economic growth.
The rally was broad-based, with 10 stocks rising for every one falling on the New York Stock Exchange. All 10 S&P 500 industry sector indexes rose at least 1 percent, led by the S&P information technology index .GSPT, up 2.2 percent.
Among the strongest names in the sector was Hewlett-Packard (HPQ.N), which rose 5.3 percent to $15 after a miserable 2012 when the stock fell nearly 45 percent.
Congress passed a bill to raise taxes on wealthy individuals and families, and preserve certain benefits, while averting immediate austerity measures. The combination of mandatory tax hikes and reduced federal spending, which had been set to go into effect on January 1, had been known as the "fiscal cliff."
"We had three choices: We were going to be off the cliff, we we're going to be on the cliff, or we were going to avoid the cliff, and we avoided it," said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago.
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Bigger fights loom after "fiscal cliff" deal
President Barack Obama and congressional Republicans looked ahead on Wednesday toward the next round of even bigger budget fights after reaching a hard-fought "fiscal cliff" deal that narrowly averted potentially devastating tax hikes and spending cuts.
The agreement, approved late on Tuesday by the Republican-led House of Representatives after a bitter political struggle, was a victory for Obama, who had won re-election on a promise to address budget woes in part by raising taxes on the wealthiest Americans.
But it set up political showdowns over the next two months on spending cuts and on raising the nation's limit on borrowing. Republicans, angry the deal did little to curb the federal deficit, promised to use the debt ceiling debate to win deep spending cuts next time.
"Our opportunity here is on the debt ceiling," Republican Senator Pat Toomey of Pennsylvania said on MSNBC, adding Republicans would have the political leverage against Obama in that debate. "We Republicans need to be willing to tolerate a temporary, partial government shutdown, which is what that could mean."
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Madrid to impose direct rule in Catalonia to quash independence bid
MADRID/BARCELONA The Spanish government will impose direct rule on Catalonia, firing the regional government and forcing a new election, it said on Saturday, unprecedented steps that brought thousands of pro-independence protesters onto to the streets. | Video