Obama urges action to avoid tax hikes on middle class

WASHINGTON - US President Barack Obama called on US lawmakers Saturday to take action to avert tax increases on middle class families next year, amid last-ditch efforts to resolve the so-called "fiscal cliff."

"We're now at the point where, in just a couple days, the law says that every American's tax rates are going up. Every American's paycheck will get a lot smaller. And that would be the wrong thing to do for our economy. It would hurt middle-class families, and it would hurt the businesses that depend on your spending," Obama said in his weekly address.

Unless US Congress acts by the end of the year, a combination of tax increases and sweeping spending cuts totaling about $600 billion will kick in, the effects of which could thrust the economy back into recession.

"Congress can prevent it from happening, if they act now. Leaders in Congress are working on a way to prevent this tax hike on the middle class, and I believe we may be able to reach an agreement that can pass both houses in time," Obama said.

"The housing market is healing, but that could stall if folks are seeing smaller paychecks. The unemployment rate is the lowest it's been since 2008, but already, families and businesses are starting to hold back because of the dysfunction they see in Washington," he warned.