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Fiscal Cliff: Obama Calls Leaders To White House

(c) Sky News 2012

The Senate's top Republican says President Barack Obama has asked congressional leaders to convene at the White House for last-minute talks on a "fiscal cliff" deal.

The White House and Congress have until the end of the month to reach a compromise on how to avoid a series of tax increases and spending cuts worth $600bn (£371bn).

Senate Republican Leader Mitch McConnell says the leaders are expected to meet with the president Friday, just four days before the government goes over the so-called cliff.

The meeting would be the first time Mr Obama has huddled with all of the top members of Congress since November (Xetra: A0Z24E - news) 16 and would represent that last hope for a deal before the new year deadline.

The president spoke to each leader individually Wednesday before returning to Washington early from his Christmas holiday in Hawaii.

With the Senate reconvening Thursday night, Majority Leader Harry Reid and other Democrats criticised House of Representatives Speaker John Boehner for not calling House members back to work.

Mr Reid said Mr Boehner cared more about retaining his leadership position than resolving the bitter partisan fight over reining in deficit spending by raising taxes for some wealthy earners - the Democrats' priority - and cutting some popular benefit programmes, as demanded by Republicans.

The House will be back in session Sunday evening, said officials who spoke on condition of anonymity, saying no public announcement had yet been made.

The officials said that the Republican leadership informed the party's rank and file of the plan to meet during a conference call Thursday.

The issue has been Mr Obama's first test of muscle after his re-election in November.

At stake are Bush-era tax cuts that expire on December 31 and revert to the higher rates in place during the administration of President Bill Clinton in the 1990s.

Nearly all Americans and branches of the federal government, including the military, would be affected.
The parties are also arguing about cutting entitlement programmes like Social Security pensions.

The changes are part of a long-delayed need for the government to address its chronic deficit spending.

Meanwhile, Treasury Secretary Timothy Geithner told Congress on Wednesday that the government would hit its borrowing limit on Monday, the final day of the year.

He said he would take "extraordinary measures as authorised by law" to postpone a government default.

But he said uncertainty over the outcome of the fiscal cliff negotiations made it difficult to determine how much time those measures would buy.

Mr Geithner's news on the government about to hit its $16.4 trillion borrowing limit has brought more pressure to the process.

Mr Obama wants an increase in the borrowing limit as part of any agreement to avoid the fiscal cliff, but Republicans want concessions in return.