Budget bickering in Washington

Barack Obama said in a televised address on Friday that it was not too late to reach consensus on a US budget. He pledged a vote on his preferred model however if bipartisan talks failed. He said talks with Democrat Senate leader Harry Reid and minority Republican Senate leader Mitch McConnell left him moderately optimistic.

"It's the right thing to do for our families, for our businesses and for the entire economy," Obama said.

Obama's Democrats and the opposition Republicans agree on almost every element of the tax code, namely avoiding the tax increases for most of the population that will be automatically triggered on January 1, but have been stalled on how to deal with the wealthiest in the country. Obama has advocated a tax increase for those earning over $250,000 (189,000 euros) per year, while a recent, shelved Republican suggestion would have put the threshold at $1 million per year.

Obama said he knew that voters were watching the debate eagerly and with waning patience.

"We're now at the last minute. The American people are not going to have any patience for a politically self-inflicted wound to our economy," Obama said. "Ordinary folks, they do their jobs. They meet deadlines. They sit down and discuss things and then things happen. The notion that our elected leadership can't do the same things is mind-boggling to them. It needs to stop."

The tax increases are tied to a string of simultaneous spending cuts.

A budget deadlock last year is the root of this so-called "fiscal cliff" - it was arranged to end a standoff, with the idea being to create a future scenario so undesirable that the warring sides would be forced to compromise next time around. Economists say the combined measures, while good for the US deficit, could send the country back into recession.

Sunday deadline

Senators Reid and McConnell also said they were hopeful after Friday's talks in Washington. Obama said he was hoping for a bipartisan proposal by Sunday, which could then be hurried to a vote in both the House and the Senate.

"But if an agreement isn't reached in time between Senator Reid and Senator McConnell, then I will urge Senator Reid to produce a bill," Obama said. The president said he thought such a proposal could also pass both houses with a simple majority, but only if it was allowed to reach the floor.

Republicans might consider a "filibuster" to stop the vote, where a Senator or Senators take to the floor to talk at length and thus stall a vote. Such a process can itself be stopped by a vote, but that ballot would require a 60-40 majority - something the Democrats would be far less likely to attain. Filibustering is not an option in the lower house, but Republican House Speaker John Boehner said he would only allow a vote once the Senate had cast its ballots.

On Wall Street, the Dow Jones Industrial Average shed over 1 percent of its value Friday as traders followed the deadlock.

msh/av (AFP, AP, dpa)