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Congressional Leaders Optimistic On Budget Deal

President Obama brought congressional leadership to the White House Friday morning for the first direct talks about the impending tax hikes and spending cuts that economists say could return the country to recession if not modified.

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AUDIE CORNISH, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish.

MELISSA BLOCK, HOST:

And I'm Melissa Block. For the first time since the election, Republican and Democratic congressional leaders came together at the White House and by all accounts, it was time well spent.

REPRESENTATIVE JOHN BOEHNER: We had a very constructive meeting with the president.

SENATOR HARRY REID: So I think it was a very constructive meeting.

UNIDENTIFIED WOMAN: It was a very constructive meeting.

SENATOR MITCH MCCONNELL: I could only echo the observations of the other leaders that it was a constructive meeting.

BLOCK: And so began what could become the most consequential horse trading in years - a quest to avert sharp tax increases as well as across the board spending cuts all starting January 1st. NPR's David Welna has this report.

DAVID WELNA, BYLINE: Making the wealthy foot a bigger share of the tax burden was a central tenet of President Obama's reelection campaign. But today, as he welcomed congressional leaders to the White House, Mr. Obama did not specifically mention that aim. Instead, he simply said they all had to make sure taxes don't go up on middle class families.

PRESIDENT BARACK OBAMA: My hope is that this is going to be the beginning of a fruitful process where we're able to come to an agreement that will reduce our deficit in a balanced way, that we will deal with some of the long term impediments to growth and we're also going to be focusing on making sure that middle class families are able to get ahead.

WELNA: It's a negotiation likely to take place largely between the president and Speaker of the House John Boehner. The president tried getting off on the right foot in this high stakes dance by wishing the Republican leader a happy birthday a day early.

OBAMA: We're not going to embarrass him with a cake because we didn't know how many candles were needed, but...

BOEHNER: Yeah, right.

OBAMA: But we do want to wish him a happy birthday.

BOEHNER: Thank you.

WELNA: After meeting for more than an hour behind closed doors, the leaders sized up their talks on the White House driveway. Without providing any details, Boehner said he'd laid out a framework for reforming both the tax code and federal spending.

BOEHNER: And I believe that the framework that I've outline in our meeting today is consistent with the president's call for a fair and balanced approach. To show our seriousness, we've put revenue on the table, as long it's accompanied by significant spending cuts.

WELNA: For Senate Republican leader, Mitch McConnell, the fix goes beyond spending cuts to programs such as Social Security, Medicare and Medicaid.

MCCONNELL: 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. We're prepared to put revenue on the table, provided we fix the real problem.

WELNA: Senate Majority Leader Harry Reid had previously warned he would oppose any deal that touched Social Security, but today, Reid struck a conciliatory note saying both sides will have to give up some things they know are a problem. He said there is now a plan which leaders will work on during next week's Thanksgiving congressional recess.

REID: We all know something has to be done. There is no more let's do it some other time. We're going to do it now. I think we feel very comfortable with each other and this isn't something we're going to wait until the last day of December to get it done.

WELNA: Still, any deal the leaders agree on to void the so-called fiscal cliff will have to be passed by the Republican-led House. That chamber has already voted on near party lines this year to extend all the expiring Bush-era tax cuts. Louisiana Republican Steve Scalise was just elected as the new leader of the influential and conservative Republican Study Committee. He adamantly opposes higher tax rates for upper incomes.

REPRESENTATIVE STEVE SCALISE: The president himself has said in the past that if you raise taxes in a bad economy it will hurt the economy. The president said that. You know, we agree with the president on that because it's been proven throughout time.

WELNA: The challenge facing both President Obama and Boehner is striking a deal the speaker can actually sell to his rowdy caucus. David Welna, NPR News, the Capitol. Transcript provided by NPR, Copyright NPR.

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