President, Congress meet to avert "fiscal cliff"

President Obama met with House Speaker John Boehner, Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell and House Minority Leader Nancy Pelosi on Friday morning to discuss how to avert the "fiscal cliff," the combination of tax hikes and spending cuts set to start kicking in at the end of the year.

It was the president's first meeting with Congressional leaders on the issue since his reelection, and follows presidential sit-downs earlier this week with corporate leaders and left-leaning interest groups seeking to shape the discussion.

"Today, the President met with the bipartisan, bicameral leadership of Congress at the White House for over an hour," the White House said in a statement. "The President and the leadership had a constructive meeting and agreed to do everything possible to find a solution that averts the so-called 'fiscal cliff,' and to work together to find a balanced approach to reduce our deficit that includes both revenues and cuts in spending and encourages our long-term economic and job growth. Both sides agreed that while there may be differences in our preferred approaches, we will continue a constructive process to find a solution and come to a conclusion as soon as possible."

Congressional leaders described the meetings positively as well, with Boehner calling it "very constructive." An aide to the House GOP leader told CBS News that "the Speaker said he believes 2013 should be the year we begin to solve our debt problem through tax reform and entitlement reform, and proposed that both parties work together to avert the fiscal cliff together in a manner that ensures 2013 is that year. He proposed that both parties commit to working toward a framework for tax and entitlement reform in 2013 that sets revenue and spending levels."

Reid, meanwhile, said "We have the cornerstones of being able to work something out. We're both going to have to give up some of the things that we know are a problem."

Mr. Obama appeared to be in good spirits prior to the meeting, publicly congratulating Boehner on the fact that tomorrow is his birthday. ("We're not going to embarrass him with a cake," the president joked, "because we didn't know how many candles were needed.") But no amount of good cheer will make it easier for the two men to bridge their considerable differences without angering elements of their own party and base before the Dec. 31 deadline.

The most glaring difference involves allowing the Bush-era tax cuts expire on family income above $250,000, which would raise rates above that level from 35 percent to 39.6 percent. Mr. Obama campaigned on allowing those cuts to expire for the highest-earners, and he stressed the issue in a news conference Wednesday. He has called on Congress to immediately pass legislation to extend the Bush-era tax cuts for the 98 percent of Americans who make below that threshold. Without action, tax rates will increase for nearly all households at the end of the year. White House press secretary Jay Carney said this week that the president "will not sign, under any circumstances, an extension of tax cuts for the top 2 percent of American earners." Mr. Obama's opening salvo was to increase taxes on the wealthy and corporations by $1.6 trillion in conjunction with unspecified spending cuts.

Republicans are also publicly standing by their position, though there have been some cracks in the united front. "What we won't do is raise tax rates," McConnell said Thursday. Boehner has offered a conciliatory tone and said he is open to revenue increases, but argues that they should come from reforms to the tax code such as closing loopholes - the same position he held before the election. He says that raising rates on the wealthiest Americans would hurt small business and cause harm to the economy, a contention that is up for debate. Republicans are seeking major changes to entitlement programs, which they consider the chief driver of the deficit and debt.

Yet Gov. Bob McDonnell, R-Va., and former Gov. Haley Barbour, R-Miss., said this week that Republicans need to be open to raising tax rates on the wealthy in the wake of an election in which the "people have spoken," in McDonnell's words. Another influential Republican, Weekly Standard editor William Kristol, said last Sunday that "It won't kill the country if we raise taxes a little bit on millionaires."