US President Barack Obama had cut short his Christmas holiday in Hawaii to resume talks in Washington over how to avoid the 'fiscal cliff'.

If a compromise is not found, tax increases and huge spending cuts will come into force from the 1<sup>st January, threatening to pull the US back into recession.

Despite this end of year deadline fast approaching, talks between the White House and republicans appear nowhere near a solution.

Republican House of Representatives Speaker John Boehner has asked the Democrat-controlled Senate to pass its own legislation on avoiding the cliff, with the US Treasury announcing what they have labelled 'extraordinary measures' to prevent it hitting a legal limit on its borrowing.

The corridors of congress are silent for now, but analysts remain hopeful that a short-term deal may be agreed that will postpone the potentially devastating cuts until spring.

Written and presented by Alfred Joyner