Congressional leaders emerged from a meeting with President Obama Friday expressing optimism about a new "framework" for an agreement that would stave off the looming "fiscal cliff" of steeper tax hikes and spending cuts for the federal government by the end of the year.
Speaker John A. Boehner, Ohio Republican, said he outlined an agreement with an unspecified mix of tax reforms and spending cuts, and he sounded optimistic that a deal on a general framework could be reached in the lame-duck Congress to avert the fiscal cliff with more detailed overhauls to the tax code and entitlement programs coming next year.
"We had a very constructive meeting with the president," Mr. Boehner told reporters at the White House. "I believe the framework that I have outlined .... is consistent with the president's call for a fair and balanced approach. To show our seriousness, we put revenue on the table, as long as it's accompanied by significant spending cuts."
The president and lawmakers are trying to avoid automatic tax hikes for all Americans on Jan. 1, when George W. Bush-era tax cuts are set to expire, as well as automatic, across-the-board spending cuts to both domestic and defense programs that would kick in as part of a 2011 agreement to reduce the deficit.
Senate Majority Leader Harry Reid, Nevada Democrat, said he "felt very good" about the negotiations in the Cabinet Room of the White House.
"We have the cornerstones of being able to work something out," Mr. Reid said. "We have arrived at a point where we all know that something has to be done."
Senate Minority Leader Mitch McConnell, Kentucky Republican, said an agreement will need to include trims to entitlement programs, noting the increased demand caused by the retiring baby boom generation.
"We fully understand that you can't save the country until you have entitlement programs that fit the demographics of the changing America in the coming years," he said, speaking for the Senate GOP caucus. "We're prepared to put revenue on the table, provided we fix the real problems."
Mr. Boehner also stressed the need for entitlement reform during the meeting, noting without it, the country will continue to face more frequent and more severe funding crises in the future, according to his office.
The session was the first meeting between lawmakers and the president since Mr. Obama's re-election last week.
The president has been pushing to raise taxes on families earning more than $250,000 per year, although in recent days Mr. Obama has put less emphasis on raising tax rates as long as the government can raise more money from the highest-income group in some fashion, possibly by closing tax loopholes.
Republican lawmakers have resisted raising tax rates, although they, too, say they are open to raising more revenue through changes in the tax code.
"While we're going to continue to have revenue on the table, it's incumbent for my colleagues to show the American people that we're serious about cutting spending and solving our fiscal dilemma," Mr. Boehner said. "I believe that we can do this and avert the fiscal cliff that's right in front of us today."
House Minority Leader Nancy E. Pelosi, California Democrat, said she is "confident that a solution may be in sight."
"We understand that it has to be about cuts, it has to be about revenue, it has to be about growth," Mrs. Pelosi said. "It was good."
She also said she was more focused in the meeting on sending the public a "message of confidence" so that consumers and financial markets will be calmed, knowing that an agreement is in the works.
"We should have a goal in terms of how much deficit reduction, we should have a deadline before Christmas, we should share some milestones of success so that confidence can build as we reach our solution," she said.
White House press secretary Jay Carney also called the meeting "productive."
"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," Mr. Carney said in a statement.
Because changes to the tax code and entitlement programs are too complex to complete by the end of the year, aides said Mr. Boehner's goal in the coming weeks is to settle on targets for long-term revenue and savings from entitlement programs.
"Once we settle on those targets, the speaker proposed, we can create simple mechanisms in statute that would achieve those revenue and spending goals," according to one Boehner aide. "They would be in place unless or until more thoughtful policies replace them."
Senate Finance and House Ways and Means Committees staff will spend the next week working on the framework with the goal of presenting it to congressional leaders when they return to Washington after the Thanksgiving holiday. They will then work on negotiating the finer points of a deal over the next few weeks and pass the framework the weekend before Christmas.
— Staff writer Susan Crabtree contributed to this article.
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