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A tentative deal has emerged out of fiscal cliff negotiations, with Democrats and Republicans agreeing to raise taxes on families with incomes over $450,000 a year.
President Barack Obama spoke about the fiscal cliff on Monday, as Congress scrambled to hammer out a deal before the midnight deadline that would automatically lead to tax hikes and spending cuts that could damage America's gradual economic recovery.
"Preventing that tax hike [on middle class Americans] has been my biggest priority," Obama said, pointing to the middle class tax payers standing behind him. "There are still issues left to resolve, but we're hopeful that Congress can get it done."
Obama said Congress needed to be reminded, "This is a pressing concern on people's minds."
He said some of the spending cuts which would go into effect automatically would use an ax instead of a scalpel.
Obama also stated he was willing to reduce the deficit using a "balanced and responsible" approach. He spoke of "shared sacrifice" when talking about how to tackle the deficit, calling on wealthy Americans to do their fair share.
"As of this point it looks like I'll be spending New Year's here," Obama said to a chorus of 'awws' from the crowd.
"Keep the pressure on over the next 12 hours or so. Let's get this thing done," he said.
A tentative deal has begun to emerge out of negotiations led by Vice President Joe Biden and Senate Minority Leader Mitch McConnell. Democrats and Republicans reportedly agreed to raise taxes on families with incomes over $450,000 a year, according to the Associated Press which cited officials familiar with the talks.
The New York Times said individuals making more than $400,000 or couples making more than $450,000 would have their taxes raised from 35 percent to 39.6 percent. In addition to those hikes, the dividends and capital gains tax rates would also rise from 15 percent to 20 percent.
Estate taxes would also rise, with the value of estates over $5 million being taxed 40 percent, instead of the current 35 percent, said The Times. The middle and working class tax cuts implemented by the Democrats would be extended for five years, according to the deal.
Democrats also reportedly won an extension for unemployment insurance, with a price tag of $30 billion.
Speaking earlier on Monday, Senate Majority Leader Harry Reid said, "Discussions continue today on a plan to protect middle-class families from a tax increase tomorrow. There are a number of issues on which the two sides are still apart but negotiations are continuing as I speak," according to Reuters.
"We really are running out of time. Americans are threatened with a tax hike in just a few hours."
If no deal is reached, more than $500 billion in tax increases will go into effect, as will $109 billion in spending cuts in defense and domestic programs, said the AP.
The Huffington Post reported on Monday afternoon that Congress won't meet the midnight deadline to avert the fiscal cliff. The House of Representatives will adjourn without voting on the bill to delay tax hikes and spending cuts. It is expected that the Senate will have come to an agreement by the end of Monday, which The HuffPost said might prevent the markets from reacting too negatively to the House missing the deadline.
More on GlobalPost: Fiscal Cliff: Biden, McConnell making 'major progress' on deal, reports Politico
Watch Obama's remarks below: