President Obama is expected to meet Republican leaders to try to find a compromise US President Barack Obama has cut short his holidays in Hawaii and is flying to Washington to try to reach a deal to avoid the so-called "fiscal cliff".Unless a compromise is found, tax increases and huge spending cuts come into force on 1 January, threatening to tip the US back into recession.
However, Democrats and Republicans are still at loggerheads over the issue.
Meanwhile, the US Treasury is to take extraordinary measures to delay reaching a 31 December borrowing limit.
In a letter to Congress, Treasury Secretary Timothy Geithner said it would take accounting measures to save about $200bn to prevent reaching the $16.4tn borrowing limit.
He said this would prevent the government from reaching the borrowing limit for about another two months.
This $16.4tn is the amount the government is allowed to borrow to finance its operations.
'Silent corridors' Continue reading the main story On 1 January 2013, tax increases and huge spending cuts are due to come into force - the so-called fiscal cliff Deadline was put in place in 2011 to force president and Congress to agree ways to save money over the next 10 yearsFear is that raising taxes while massively cutting spending will have huge impact on households and businessesExperts believe it could push the US into recession, and have a global impact on growthMr Obama is expected to meet Republican leaders again to try to negotiate a solution, although no new date has been announced.Failure to do so could damage the US and global markets, and threatens to send the US economy into recession.
The two sides remain far apart on the fiscal cliff's $600bn in tax rises and spending cuts, but analysts say a short-term deal may be agreed that will postpone the cuts until spring.
On Wednesday, the Republican House of Representatives Speaker John Boehner called on the Democrat-led Senate to come up with legislation on how it would avoid the cliff, and pass it to the House for consideration.
However, a senior administration official said it was up to Republican leaders not to stand in the way of an agreement.
Despite this, there is little sense of urgency in the capital - the corridors of Congress are silent, the BBC's Zoe Conway in Washington reports.
Tax year 1993-2000 2001 2002 2003-2008 2009-2012 2012 tax brackets 2013 scenariosSource: Tax Foundation, IRS
Tax brackets shown for unmarried individuals
Bill Clinton
George W Bush
Barack Obama
Tax cuts expire for top incomes
