The nonpartisan Congressional Budget Office has said that the cuts, along with tax increases, could raise the unemployment rate to about 9 percent. Its now 7.9 percent.
Both parties oppose the spending reductions, but theyve disagreed for months on what to do about them. They postponed their discussions until after the election. Congress will return to Washington on Tuesday.
With voters returning Obama to the White House and Republicans to a majority in the House, each man says the American people prefer his solution.
On Tuesday night, we found out that the majority of Americans agree with my approach and that includes Democrats, independents and a lot of Republicans across the country, as well as independent economists and budget experts, Obama said. So our job now is to get a majority in Congress to reflect the will of the American people.
One politically worrisome element of the fiscal cliff is that nearly every tax cut enacted in the last decade is set to expire at the end of this year. The $500 billion tax increase that would be paid by Americans at all income levels would have the average household paying $3,500 more, according to nonpartisan estimates.
Republicans want to extend all the tax cuts enacted under President George W. Bush and extended by Obama through at least next year.
Obama urged the House to approve a bill that the Senate already has passed that would extend all the tax reductions on individual incomes below $200,000 and household incomes below $250,000. He wants to revive the top income-tax rate of 39.6 percent for the wealthiest earners.
On Capitol Hill, Boehner outlined in general terms how additional revenue could be raised without a tax increase: overhauling the tax code, closing loopholes and spurring economic growth. But he wouldnt get specific.
Its clear that there are a lot of special interest loopholes in the tax code, both corporate and personal, Boehner said. Its also clear there are all kinds of deductions, some of which make sense, some dont.
Romney had proposed a 20 percent across-the-board reduction in income tax rates. Boehner is not, and Congress Joint Committee on Taxation found last month that even eliminating the most popular deductions would support only a 4 percent rate cut.
Boehner also wouldnt specify what goal he had for the federal deficit, which was $1.1 trillion in fiscal 2012, the 12-month period that ended Sept. 30. The number was down about $207 billion from the previous year, but it was still the fourth straight year that the deficit topped $1 trillion.
Clearly the deficit is a drag on our economy, the speaker said, but he added, I dont want to box myself in.
Nor would he get precise about what changes hed want in entitlements such as Medicare or Social Security.
This has to be dealt with, he said. So everything everything on the revenue side and the spending side has to be looked at.
Obama, joined by Vice President Joe Biden, appeared in the East Room of the White House in front of nearly 200 supporters Friday afternoon. He didnt take questions.