U.S. President Barack Obama says a deal is close to avoid the fiscal cliff.
(SOUNDBITE) (English) PRESIDENT BARACK OBAMA SAYING:
"Today it appears that an agreement to prevent this New Year's tax hike is within sight, but it is not done."
Obama won re-election partially on a promise to raise tax rates on the richest Americans.
(SOUNDBITE) (English) PRESIDENT BARACK OBAMA SAYING:
"The agreement being worked on right now would further reduce the deficit by asking the wealthiest two percent of Americans to pay higher taxes for the first time in two decades. So, that would add an additional hundreds of billions of dollars to deficit reduction - so that is progress, but we will need to do more."
On the Senate floor Minority leader Mitch Mcconnell says a deal is underway
(SOUNDBITE) (English) SENATE MINORITY LEADER MITCH MCCONNELL SAYING:
"We are very very close to an agreement. We need to protect American families and job creators from this looming tax hike, everyone agrees that that action is necessary, and I can can report that we have reached an agreement on all of the tax issues, the tax issues, we are very very close."
Sources say a sticking point remains how long to delay automatic spending cuts to defense and domestic programs.
Without a deal, more than $500 billion in tax hikes and federal spending cuts will begin to take effect on January 1 with a potentially devastating impact on the economy.
