President Obama invites leaders to White House for 'fiscal cliff' talks


Republicans and Democrats have promised to work together, but there is a deep split about how to reduce the deficit. The pressure is on to cut a deal before January.

Mr. Obama says the first priority has to be jobs and growth. He calls for a balanced approach that would not unfairly burden the middle class. During a Friday news conference, the president said he has the backing of the voters who favor tax increases for wealthy Americans.

"This was a central question during the election," Obama said in his first postelection comments on the economy. "The majority of Americans agree with my approach."

But Republicans are standing their ground. At the Capitol, Republican House Speaker John Boehner said he remains unwilling to raise tax rates on upper-income earners. But he left open the possibility of balancing spending cuts with new revenue that could be achieved by revising the tax code to lower rates and eliminate some tax breaks.

The clock is now ticking down as the nation heads towards the so-called "fiscal cliff." Without a new deal by January there will deep automatic federal spending cuts and tax increases - some $668 billion worth. That would threaten to push the U.S. back into a recession.

"We can't just cut our way to prosperity," Mr. Obama said. "If we're serious about reducing the deficit, we have to combine spending cuts with revenue, and that means asking the wealthiest Americans to pay a little more in taxes."

The president avoided any mention of specific tax rates in his remarks, saying only that the wealthy should pay more. He also called on Congress to quickly pass an extension of tax cuts, first enacted by George W. Bush, for families making less than $250,000 a year.

The Associated Press contributed to this report.

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