Optimism expressed in 'fiscal cliff' talks

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WASHINGTON -- Congressional leaders from both parties voiced fresh optimism Friday after meeting with newly re-elected President Barack Obama about avoiding year-end "fiscal cliff" tax increases and spending cuts that would hammer the middle class and risk plunging the economy into recession.

House Speaker John Boehner (R-Ohio) said Republicans are willing to consider increased revenue "as long as it is accompanied by spending cuts" as leaders in a divided government get to work on a possible deal after a fierce election campaign.

He presented a framework that one official said called for a deficit down payment of unspecified size by year's end, to be followed by comprehensive tax reform and an overhaul of Medicare and other benefit programs in 2013.

Democrats indicated some spending cuts would be fine with them. "I feel confident that a solution may be in sight," House Democratic leader Nancy Pelosi of California said.

The goal of the high-pressure talks to come is to produce a multitrillion-dollar deficit-reduction plan that can take the place of the across-the-board tax increases and spending cuts that are slated to take effect on Jan. 1.

Obama stressed that time was short. "We have urgent business to do," he said.

There was no indication that the meeting touched on Obama's call to raise tax rates at upper incomes. Obama ran for re-election on a call for a "balanced approach" to deficit reduction that includes raising taxes on incomes greater than $200,000 a year for individuals and $250,000 for couples.

Senate Republican leader Mitch McConnell told reporters that while Republicans are willing to discuss increased revenue, most members of his party "believe we are in the dilemma we are in not because we tax too little but because we spend too much."

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White House press secretary Jay Carney said, "Both sides agreed that while there may be differences in our preferred approaches, we will continue a constructive process to find a solution . . . as soon as possible."

For all the expressions of optimism, it was unclear whether the elections and the prospect of the so-called fiscal cliff would serve as a strong enough catalyst for these talks to succeed where others have failed.


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