THE US Congress returns from its week-long Thanksgiving holiday on Monday, as politicians and President Barack Obama try to avert a looming fiscal crisis that could send the entire American economy plunging into recession again.
Officials in Washington are hoping to find a way to avoid a year-end "fiscal cliff", a convergence of tax increases and massive spending cuts, including slashes to the military, which some experts say could bring dire economic consequences - possibly sparking another crippling economic slowdown.
Both Republicans and Democrats are well aware of the need for the country to get its fiscal house in order, as the US tries to rein in a huge debt that has been growing bigger by the day and reduce deficit spending.
After months of stalemate, congressional leaders met on November 16 with Obama, who is deemed to have a considerably stronger negotiating hand after handily winning re-election 10 days earlier.
Just five weeks now remain in the calendar year to conclude an agreement before the expiration of tax cuts put in place during the presidency of Obama's predecessor, George W. Bush.
Obama has said that any deal he concludes would have to include an increase in taxes on wealthy Americans, something congressional Republicans so far have rejected.
The plan he proposes - and presented to voters on the campaign trail - would raise the tax rate for top earners but keep Bush-era tax rates for individuals who make less than $US200,000 a year and families earning less than $US250,000.
Republicans insist that raising taxes on the wealthy would be counter-productive and only serve to slow economic growth and ensure that the country continues to be plagued by economic stagnation.
They insist that higher taxes would dampen spending and hiring and investment by business owners.
Republicans say they prefer to look at ways to bring in more tax revenue by completely overhauling the old and unwieldy US tax code, including closing what they say are "special interest loopholes" likely to hit the poor and the middle class as well as the rich.
Several economists also have said that closing loopholes and ending deductions likely would not generate sufficient money to chip away at the debt, and that a combination of tax increases and spending cuts will be needed.
Some experts said that there need not be a "grand deal" by the end of the year, because they could give themselves an extension by passing new legislation.
Further complicating efforts to reach a deal is the fact that Congress is in "lame duck" mode.
During the interregnum, lasting several weeks after every election, outgoing members of Congress have only a few weeks to wrap up legislative business before they are out the door and the newly elected members are in place in January.
Another wrinkle is a pledge signed by numerous Republicans over the span of more than two decades, vowing never to vote for tax increases.
There are signs, however, that some Republicans in Congress - now aware that they have been rendered utterly hamstrung by the pledge - are re-thinking their position.
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