The US appears to be heading over the "fiscal cliff", with prospects dim for a deal to avoid tax rises and spending cuts, the Senate majority leader says. Speaking on the Senate floor, Democrat Harry Reid said there did not seem to be enough time to craft a deal before Monday night's end-of-year deadline. Analysts say heading over the "cliff" could tip the US into recession. The president wants to ensure that taxes do not rise for Americans earning under $400,000 (£250,000), and insists on raising new tax revenue in any deal.
Here remember. The term fiscal cliff refers to the combination of almost $600bn (£370bn) of tax rises and spending cuts due to come into force on 1 January if Congress does not pass new legislation.