CNN - President Barack Obama and congressional leaders met Friday at the White House to discuss the looming combination of tax hikes and spending cuts as increasingly anxious markets and taxpayers looked for any hint of progress.
Diminished hopes for a substantial agreement in Washington again depressed stock indexes on Wall Street despite other encouraging news on the economy. Consumer confidence has also softened due to political inaction.
Economists warn that continued stalemate could trigger recession as taxes go up on everyone with the expiration of lower rates from the administration of President George W. Bush, coupled with slashed government spending, including for the military.
The White House meeting that started shortly after 3 p.m. ET included Obama, Vice President Joe Biden, House Speaker John Boehner, House Minority Leader Nancy Pelosi, Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell, as well as Treasury Secretary Timothy Geithner.
The meeting ran a little more than an hour, according to a White House official. No details were immediately available.
Prior to the meeting, a source familiar with the matter said Obama would propose the same framework for a scaled-back agreement that he described last week.
Such a plan would extend current tax rates on family income up to $250,000 while allowing a return to higher rates above that level. It also would extend unemployment benefits and address some other issues, according to the source.
Obama planned on asking the Republican leaders if they had a counter-proposal that could pass the House and Senate, the source said. If they didn't, the president was prepared to ask them to hold an up-or-down vote on his plan, meaning it would need a simple majority to pass, the source added.
Friday's meeting came with the Senate back in town after a Christmas holiday for a rare end-of-year appearance before a new Congress convenes early in the new year. Boehner plans to bring the House back on Sunday.
Reid and McConnell took turns blaming the other side for the impasse on Thursday, but neither seized the chance to offer remarks when the Senate opened on Friday. Other senators expressed opinions on the negotiations ranging from optimism to frustration.
"When the dust settles and everything is said and done, federal individual income taxes are not going to go up on almost all Americans next year," GOP Sen. Lamar Alexander of Tennessee told reporters.
Democratic Sen. Chuck Schumer of New York told NBC's "Today" show he was "a little more optimistic today" about reaching a deal.
"Sometimes it's darkest before the dawn," Schumer said, noting the renewed engagement by McConnell and Boehner, the top congressional Republicans.
"The fact that (Boehner's) come back and the four of them are at the table means to me we could come up with some kind of agreement that would avoid the main parts of the fiscal cliff, particularly taxes going up on middle-class people," he added.
Sen. Olympia Snowe, R-Maine, told CNN's "Starting Point" that a deal must originate from talks between Obama and the four congressional leaders for Americans to regain confidence in the federal government.
"It's got to start with the leaders and the president at the White House this afternoon. Hopefully they'll agree to a framework," said Snowe, who is retiring.
"I hope the speaker can get this job done before the end of this year and not defer it to next year," she continued. "We've got to demonstrate we have some capacity left to make decisions in Washington on these very significant issues for the country."
However, Republican Sen. Bob Corker of Tennessee downplayed the importance of Friday's meeting on CBS "This Morning," saying it "feels too much to me like optics to make it look like we're doing something."
"This is a total dereliction of duty at every level," added Corker, who has called for Republicans to compromise on the central issue of allowing tax rates to increase on top income brackets. "I've been very surprised that the president has not laid out a very specific plan to deal with this, but candidly Congress could have done the same and I think the American people should be disgusted."
He predicted Friday's meeting would result in a "kick-the-can-down the road" solution, meaning larger questions on tax increases and spending cuts would be put off until next year.