Obama, Boehner meet in fiscal cliff talks

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President Barack Obama and Republican House Speaker John Boehner held surprise talks Thursday, as time ran short for hopes of a pre-Christmas deal to solve a fiscal crisis that could cause a recession.

The rivals met at the White House, for 50 minutes, for the first time since Sunday, but there was little sign of progress between them on efforts to defuse an end-of-year time bomb of tax hikes and huge spending cuts.

"The president and speaker had a frank meeting in the Oval Office tonight. There will be no further readout of the meeting, but lines of communication remain open," said Boehner spokesman Brendan Buck.

White House aides were similarly opaque about the talks, which included Obama's Treasury Secretary Timothy Geithner, a key player in efforts to reach a deal, and came as Democrats again demanded tax hikes on the rich and Republicans held out for draconian spending cuts.

"It's clear that the president is just not serious about cutting spending. But spending is the problem," Boehner earlier told reporters, insisting that tax increases alone will not resolve the fiscal crisis.

"The president wants to pretend that spending isn't the problem -- that's why we don't have an agreement."

Boehner used a chart showing bloated government spending if no further cuts are made, and warned "here we are at the 11th hour, and the president still isn't serious about dealing with this issue right here."

"If the president will step up... I think we can do some real good in the days ahead."

Unless a deal is done by the end of the year, all Americans will see their taxes go up and steep automatic budget cuts will come into force.

With such a hit, many analysts believe that the fragile economic recovery could be thrown into reverse and there is alarm abroad at the impact on financial markets if no deal is done.

The White House counters that Obama made serious proposals to cut spending last year, which are still on the table, and accuses Republicans of simply wanting to shield the richest Americans from paying more in taxes.

Obama wants to extend expiring tax cuts for 98 percent of Americans but to let rates rise for the top two percent of earners. Republicans are open to taking in more revenue, but only by closing loopholes and cutting deductions.

They also want to make efficiencies to programs like Social Security retirement savings and Medicare health insurance for the elderly, which are dear to the hearts of Democrats.

In bargaining so far, Obama has lowered his gambit for new tax revenue to $1.4 trillion over 10 years. Boehner has offered only $800 billion in new tax revenue.

The White House insists there will be no deal without a rise in tax rates on families earning over $250,000 and individuals taking in $200,000, saying it is unfair to make ordinary Americans bear the brunt of the austerity.

"It is not a tenable position to say that the tax cuts for the wealthy should be made permanent. It's not going to happen," White House spokesman Jay Carney said.

"The president has made that clear."

After days of political maneuvering, it was unclear whether the rhetoric suggesting stalemate by both sides was for public consumption and masking behind the scenes progress, or was a genuine sign of discord.

Obama believes that his stance on raising taxes for the wealthy was mandated by voters who re-elected him to a second term in November.

Boehner meanwhile is seeing polls that support Obama's approach but is forced to deal with a conservative and restive party base that is opposed to raising taxes under any circumstances as a matter of principle.

Given the time Congress would take to codify any agreement in legislation and to debate and pass bills, a deal would have to come within days if the so called "fiscal cliff" is to be averted by Christmas.

Alternatively, lawmakers could be called back to town for a highly unusual session between the Christmas and New Year holidays.

Democratic House Minority Leader Nancy Pelosi said time was "the most precious of all commodities" and that both sides need to buckle down in Washington and thrash out a deal.

"We really have to come to an agreement in the next couple of days, or the very beginning of next week for us to have engineered our way to a solution," Pelosi said.