(WASHINGTON) -- President Obama and top congressional leaders on Friday convened their first "fiscal cliff" summit, seeking to avert a package of sweeping tax hikes and deep spending cuts that will take effect in 46 days without a bipartisan deal.
The meeting in the Roosevelt Room of the White House was the first face-to-face encounter between Obama and Republican House Speaker John Boehner and Senate Minority Leader Mitch McConnell since the election last week. They will be joined by Vice President Joe Biden, House Minority Leader Nancy Pelosi and Senate Majority Leader Harry Reid.
Obama and Boehner sat next to each other for a brief photo opportunity before the meeting began.
"I think we're all aware that we have some urgent business to do," the president said, arguing that all sides want to avoid tax hikes on the middle class and keep the economy growing.
"My hope is that this is going to be the beginning of a fruitful process that we're going to come to an agreement that will reduce our deficit in a balanced way," he said.
There was a moment of levity during the photo opportunity when Obama wished Boehner a happy birthday. Boehner turns 63 on Saturday, but Obama joked that the negotiators wouldn't embarrass him with a cake with so many candles.
Boehner laughed at the joke.
The negotiations themselves aren't likely to be so lighthearted. Leaders on both sides must hammer out a plan to reduce the deficit by $1.2 trillion or more, identifying a mutually agreeable combination of spending cuts and potential revenue increases, through higher rates or eliminated loopholes and deductions. The plan must also address a series of expiring tax cuts or credits that touch nearly all Americans.
A deal must be reached by Dec. 31. However, the parties remain particularly at odds over whether to extend Bush-era income tax cuts for all Americans or only for those earning less than $200,000 a year, or $250,000 a year for families. Republicans insist tax rates should not rise for anyone, while Obama has vowed to hike rates on the top two percent of earners.
The stakes could not be higher: the Congressional Budget Office reported earlier this month that failure to reach a compromise -- triggering tax increases on all Americans and deep cuts to government spending on social programs and defense -- would send the U.S. economy back into recession and send unemployment skyrocketing.
Ahead of the summit, Obama has signaled that he will make a concerted push for Congress to immediately enact the one thing all sides agree on: extending Bush tax rates for families earning $250,000 or less, or 98 percent of Americans and 97 percent of small businesses.
Administration officials say the president's starting point for broader negotiations will be his call for $1.6 trillion in new revenue over the next 10 years, as reflected in his budget proposal, and a push for "balance" in any deficit reduction plan, meaning that it would include both spending cuts as well as new tax revenue.
"The president will not sign under any circumstances an extension of tax cuts for the top two percent of American earners," White House spokesman Jay Carney said Thursday.
Carney insisted Obama remains open to new ideas on how to raise additional revenue and close the budget gap, but added there is "no wiggle room when it comes to math. The math has to add up."
A senior aide to Boehner told ABC News the House Speaker would be focused on preserving his commitment to lower tax rates and spending cuts, though he has expressed openness to increasing overall tax revenue through reform of the tax code.
"This framework is consistent with the president's call for a 'balanced' approach," the Boehner aide said. "As a sign of our seriousness, Republicans have put revenue on the table, provided it comes from tax reform and is accompanied by spending cuts. President Obama must now follow suit by telling the American people what spending cuts he's willing to make."
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