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Obama to hold crucial 'fiscal cliff' talks

President Barack Obama will sit down with congressional leaders from both parties at the White House Friday in a meeting that could be decisive on whether it's still possible to avoid the year-end "fiscal cliff."

Capping a day filled with partisan bickering and pessimistic forecasts, a White House official said Senate Majority Leader Harry Reid (D-Nev.), Senate Minority Leader Mitch McConnell (R-Ky.), House Speaker John Boehner (R-Ohio) and House Minority Leader Nancy Pelosi (D-Calif.) are scheduled to attend the afternoon session.

House Republican leaders earlier announced the chamber will meet on Dec. 30 -- its first Sunday session in more than two years -- keeping a window open for action as lawmakers seek to resolve the impasse before at least $600 billion in spending cuts and tax increases begin in January.

Without a deal or a stopgap solution to buy more time, the tax hikes kick in on Jan. 1 and automatic government spending cuts start Jan. 2. Economists have warned that the combined jolt could knock the economic recovery off the rails and push the nation back into recession.

"We are coming up against a hard deadline here," McConnell said on the Senate floor Thursday. "This is a conversation we should have had months ago."

Asked whether he expected Obama to push a specific proposal at the meeting, Sen. Dick Durbin (D-Ill.) said, "I wouldn't be surprised, but I don't know that for sure."

"He came all the way back from Hawaii, and I'm sure it isn't just to share a cup of tea," said the Senate's second-ranking Democrat, referring to Obama's overnight flight to Washington cutting short a Christmas week vacation with his family.

Adding to the woes confronting the middle class was a pending spike of $2 per gallon or more in milk prices if lawmakers failed to pass farm legislation by year's end.

Top Senate leaders said they remain ready to seek a last-minute agreement.

But a little more than four days from the deadline, there was no legislation pending in either the House or the Senate to prevent the tax hikes and spending cuts that economists say could send the economy into a recession.

The two political parties remained far apart, particularly over Obama's plans to increase taxes on the wealthiest Americans to help close the budget deficit.

Far from conciliatory, the rhetoric was confrontational and at times unusually personal.

Reid accused Boehner of running a "dictatorship" by refusing to allow bills he did not like onto the floor of the GOP-controlled chamber.

Brendan Buck, a spokesman for Boehner, responded: "Harry Reid should talk less and legislate more if he wants to avert the fiscal cliff. The House has already passed legislation to do so," he said, referring to a measure that extends existing income-tax cuts at all income levels.

Addressing the GOP rank-and-file by conference call, Boehner said the next move is up to the Democratic-controlled Senate.

"The House will take this action on whatever the Senate can pass -- but the Senate must act," he said, according to a participant in the call.

The government will hit its $16.4 trillion borrowing limit -- the so-called debt ceiling -- on Monday, but Treasury Secretary Timothy Geithner said he will use accounting measures to keep the government from exceeding its borrowing limit for a few months.

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