US Politics Special: A 6-Point Guide to the "Fiscal Cliff"

President Obama calls on Friday for a resolution to avoid the "fiscal cliff"

See also US Audio Feature: So How Serious is This "Fiscal Cliff"? --- Scott Lucas with the BBC

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Editor's Note: As 2012 comes to a close, the emergency story in the US press is the "fiscal cliff". If there is no agreement by midnight, then tax cuts introduced by George W. Bush almost a decade ago will lapse, and funding of Federal programmes --- such as benefits for long-term unemployment and farm subsidies --- will be in jeopardy.

Discussions on Sunday were adjourned without agreement between the Obama Administration and Democratic and Republican leaders in Congress, despite Democratic concessions such as the raising of tax rates only on those making more than $450,000 a year and on an escalation of estate tax.

But as the haggling over details continues to the last minute, what are the basic economic issues? What happens if the clock strikes 12 and there is no dramatic resolution? EA's Lee Haddigan explains....

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US Politics Analysis: Pushing Obama and Congress Towards the "Fiscal Cliff"

Federal Reserve Chairman Ben Bernanke talks on Tuesday about the "fiscal cliff"

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America's politicians are wrestling with a basic problem --- raise taxes or cut welfare spending --- and the interested and influential advocacy groups are unlikely to be accommodating. Thought organisations supporting Obama are shouting loudest now there is little doubt that, once Republicans have come to terms with their electoral defeat, conservatives will push back hard. This is a game which is only beginning and in which the President and members of Congress are far from the only players.

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US Politics Special: Fiddling While America Defaults?

With four weeks to go before the US faces a possible default on its debt, there is still little sense of how President Obama will lead the country out of the public finances mess the nation faces. It defies belief that the Administration does not have some kind of long-term strategy to ensure that America pays its bills come 2 August, but quite what that plan is nobody outside the Administration could claim to know for sure.

One disturbing possibility to begin considering is that Obama is privy to information that the crisis in America's finances is worse than thought --- his seeming reluctance to get fully involved in the debate is, in fact, a masterful attempt to avoid spooking the markets before a Band-aid can be slapped on the problem. That is pure speculation, but it says something about the ineffectiveness of the President that the only way to take some cold comfort from his performance is to imagine an even worse scenario.

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US Politics Analysis: Setting Out the Medicare Crisis

An ideological clash looms over the reality that health care costs are on an unsustainable upward curve. Both parties have different and deeply divergent opinions on how those costs should be controlled, but the Medicare Trustees Report unequivocally sets outs:

The sizable differences in projected Medicare cost levels between current law and the illustrative alternative scenario highlight the critical importance of finding ways to bring Medicare costs --- and health care costs in the U.S. generally --- more in line with society's ability to afford them.

Quite how that "critically important'"solution can be found in the existing political climate remains a mystery.

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US Politics: Beyond the Budget Dispute, A Crisis in Health Care

The starting point for the health care debate is that the US spent nearly $2.2 trillion, or $7,400 per person, on health care in 2007. To put that in context, $2.2 trillion is double the total of discretionary spending, which includes defense, in 2010, and itrepresents 16% of America's annual GDP.

Those numbers and percentages have been been rapidly rising in real terms over the last 40 years. The US spent $714 billion on health care in 1990 and $253 billion in 1980; as a share of GDP, health care has increased from 7.2% in 1970 to a projected 20.3% in 2018.

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US Politics Special: The Conservative Way Forward on Medicaid and Medicare

The conservative Roadmap's guiding philosophy is the vaunted economic efficiency of the free market,with hundreds of millions of individual choices in the health insurance market driving down the overall cost of health care provision.

Both Medicare and Medicaid began in 1965 as part of President Lyndon Johnson's "Great Society". Medicare is funded solely by federal dollars, partly through an employee payroll tax, and provides health care coverage for participants who are over 65. Medicaid is a joint state-federal enterprise, with states generally receiving a dollar of federal money for each dollar they spend, allowing low-income families to receive medical treatment.

The highlight of Rep. Ryan's recommendations for Medicaid is the issuing of a debit card to low-income families, loaded with a set amount of funds that can be paid to approved health care insurers.

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