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 has announced measures to prevent it hitting a legal limit on its borrowing.
In an open letter to the Democrat US Senate majority leader Harry Reid, Treasury Secretary Timothy Geithner said the Treasury would enact a series of extraordinary accounting measures to free up about $200bn from the government’s official borrowing figure.
He said that the measures should prevent the government from reaching the $16.4tn “debt ceiling” – the legal limit set by Congress on how much the US government can borrow – for about another two months beyond 31 December.
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