In the coming hours an announcement will be made in regards to the progress on the negotiations being carried out to prevent the U.S. fiscal cliff. Democrats and Republicans have until the end of 2012 to decide on what is to come, and in the meantime some sources report that the negotiations are not going well.
Recently, the negotiations suffered a setback due to the fact that Republicans are wanting to integrate a new system that calculates benefits received by Social Security, which is something that Democrats oppose to because it would lead to less benefits from the institution to the public. They also indicated that they had given in to some of the Republican demands regarding taxes for families earning more than $ 400,000 a year.
If Democrats do not accept the conditions, then taxes would also be valid for families earning over $ 250,000 annually, and would affect mostly the middle class.
Another contention point is the unemployment benefits, where Democrats seek to extend benefits to two years, and Republicans are proposing that it's an area where support should be reduced.
The lack of an agreement would produce the "fiscal cliff" that would lead to higher taxes and spending cuts worth about 500 billion dollars, which could lead to a new recession.
In an that interview aired this morning, President Obama discussed the fiscal cliff, amongst other things where he noted that "in the next 48 hours my hope is that people recognize, regardless of party differences that our priority should be to ensure that taxes for middle class families do not increase, and seriously damage our economy. "
In the transmission, Obama said that the Republicans are responsible for the lack of an agreement after refusing to increase taxes for the upper class, and their rejection of alternatives.
Two other important figures in the negotiations are the Senate Majority Leader, (D) Harry Reid and the Senate Minority Leader, (R) Mitch McConnell.
Both must develop a proposal that will be voted in the following hours.
In case an agreement is not reached, the new taxes will take effect on Tuesday January 1, 2013.