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No deal reached at fiscal cliff talks in Washington; Obama 'modestly optimistic'

Harry Reid, John Boehner, Nancy Pelosi met Obama at White House to talk fiscal cliff, and no deal was reached. President Obama said he was 'modestly optimistic' about a resolution before Tuesday.

Obama fiscal cliff talks 12282012Enlarge
US President Barack Obama walks across the South Lawn upon return to the White House on December 27, 2012 in Washington, DC. Obama returned to Washington under pressure to forge a year-end deal with Republicans to avoid the tax hikes and spending cuts of the "fiscal cliff." (MANDEL NGAN/AFP/Getty Images)

Political leaders from both sides of the debate trying to avoid the dreaded “fiscal cliff” appeared somewhat optimistic after today’s meetings with President Obama in Washington. The optimism was for naught, as they emerged from the meeting with no deal in hand, according to Politico.

CBS News reported Obama told reporters he was "moderately optimistic" about reaching a deal before Tuesday.

The meeting was a "good and constructive discussion about how to prevent the tax hike on the middle class," Obama said in a news conference.

The president had invited Senate Majority Leader Harry Reid (D-Nevada), Senate Minority Leader Mitch McConnell (R-Kentucky), House Speaker John Boehner and (R-Ohio) and House Minority Leader Nancy Pelosi (D-California) to the White House for meetings on Friday afternoon.

"I'm hopeful and optimistic," McConnell told the Senate floor, after returning from the 65-minute White House meeting.

Congress was supposed to use the weekend to discuss ways of avoiding going over the cliff – a combination of higher taxes and government spending cuts set to take effect on January 1.

Reid indicated he and McConnell may be able to work out a deal by the time the Senate returns Sunday afternoon, CBS News said.

“I am hopeful there will be a deal that avoids the worst parts of the fiscal cliff, namely taxes going up on middle-class people,’’ Sen. Chuck Schumer (D-New York) told NBC’s Today earlier in the day.

“I think the odds are better than people think,’’ he had added.

Sen. John Thune, a Republican from South Dakota, had also told NBC that "it is encouraging that sides are sitting down."

"They continue to have lines of communication there open, and I view that as optimistic as well,” Thune said.

Today’s meeting at the White House was the first since mid-November for Obama and the congressional heavyweights, The Associated Press reported.

More from GlobalPost: The Great Divide: global income inequality and its cost

With the New Year's deadline looming, an average American family earning $50,000 to $75,000 faces a $2,400 tax increase.

Among the theories of how to avoid the cliff, Obama will propose a "scaled-back package," Bloomberg reported.

Obama will likely renew tax cuts for the middle class, extend unemployment insurance benefits, prevent cuts to Medicare reimbursements to doctors and stop an expansion of the alternative minimum tax, Bloomberg reported.

Republican Sen. Olympia Snowe of Maine said the issue can't continue into 2013, CNN reported.

She said that Americans need to see true leadership from their elected leaders.

"Hopefully they'll agree to a framework," Snowe told CNN. "We've got to demonstrate we have some capacity left to make decisions in Washington on these very significant issues for the country."

Not everyone is convinced, however, that there’s enough time.

“I’m very surprised that the president has not laid out a very specific plan to deal with this,” Sen. Bob Corker (R-Tennessee) told CBS This Morning.

More from GlobalPost: ‘We’re going over,’ Harry Reid says 

http://www.globalpost.com/dispatch/news/regions/americas/united-states/121228/fiscal-cliff-talks-set-begin-washington-obama-le