US last-ditch fiscal cliff talks continue in Senate

WASHINGTON - US lawmakers in the upper house of Congress on Sunday were attempting to strike a last- minute deal to solve the so-called "fiscal cliff", but the fate of the negotiations still remained in doubt.

Top Senate Democrat Harry Reid on Sunday afternoon said on the Senate floor that Senate Minority Leader Mitch McConnell, the top GOP senator, made an offer last night but Democrats were unable to make a counter-offer right now.

There was no single issue blocking a bipartisan agreement but that the "sticking point" seemed to be a willingness and courage to close the deal, McConnell said on the Senate floor, two days before a slew of tax hikes and government spending cuts to kick in.

Republicans proposed a change to the formula for calculating entitlement benefits including the Social Security, which will result in shrinking benefits for seniors. The proposal was opposed by many Democrats, local media reported.

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

Obama on Friday entrusted Reid and McConnell with the task of finding a possible solution to the high-stakes "fiscal cliff." If they could not find a viable plan, Obama would ask for a vote on his own proposal that extends the current tax rates for all but the rich with annual income above 250,000 US dollars and extends the nation's unemployment benefits for 2 million people.