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White House Meeting A Last Stab At A Fiscal Deal

If there is no compromise, he said he expects Reid to put legislation on the floor to prevent tax increases on the middle class and extend unemployment benefits â¿¿ an implicit challenge to Republicans to dare to vote against what polls show is popular.

The president also booked a highly unusual appearance on Meet the Press for Sunday, yet another indication of his determination to retain the political high ground that came with his re-election.

The guest list for the White House meeting included Reid, McConnell, Boehner and House Democratic leader Nancy Pelosi, D-Calif.

The same group last met more than a month ago and emerged expressing optimism they could strike a deal that avoided the fiscal cliff. At that point, Boehner had already said he was willing to let tax revenues rise as part of an agreement, and the president and his Democratic allies said they were ready to accept spending cuts.

Since then, though, talks between Obama and Boehner faltered, the speaker struggled to control his rebellious rank and file, and Reid and McConnell sparred almost daily in speeches on the Senate floor. Through it all, Wall Street has paid close attention, and the meeting was still going on at the White House when stocks closed lower for the fifth day in a row.

The core issue is the same as it has been for more than a year, Obama's demand for tax rates to rise on upper incomes while remaining at current levels for most Americans. He made the proposal central to his successful campaign for re-election, when he said incomes above $200,000 for individuals and $250,000 for couples should rise to 39.6 percent from the current 35 percent.

Boehner refused for weeks to accept any rate increases, and simultaneously accused Obama of skimping on the spending cuts he would support as part of a balanced deal to reduce deficits, remove the threat of spending cuts and prevent the across-the-board tax cuts.

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