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Early fiscal cliff talks may show path to deal

WASHINGTON -- U.S. President Barack Obama and top lawmakers agreed on Friday to work on a framework for reforming the U.S. tax code and “entitlement” programs next year, in what could be an important first step in averting the upcoming fiscal cliff.

While the congressional leaders and the president had spoken individually in the past week in public statements about a construct for going forward, Friday's session marked the first time they sat in a room together and struck a similar chord.

An agreement to discuss tax and entitlement reform, most pressingly Medicare, the health program for the elderly, would not be sufficient to solve the more immediate problem of averting the fiscal cliff, the broad tax increases and spending cuts set to start in January.

But a promise for the future is seen as necessary to convince members to compromise in the here and now, probably by replacing the relatively extreme fiscal cliff measures with less harmful deficit-reduction steps.

The development came during the first meeting between Obama and Republican and Democratic congressional leaders since the election. Attending were the president, Boehner, Republican Senate Minority Leader Mitch McConnell, Democratic Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi.

Following the hourlong White House meeting, Boehner said at he had “outlined a framework that deals with reforming our tax code and reforming our spending.”

A Boehner aide, who asked not to be identified, said later the spending cuts would cover “entitlements” — the large federal benefit programs that include Medicare for the elderly and Medicaid for the poor.

“This is a construct all present (in the White House meeting) agreed was needed,” the aide said.

A Democratic aide, who also asked not to be identified, did not dispute that tax and entitlement reforms had to be worked on next year.

The aide added that the “key discussion right now” is what to do about across-the-board income tax rates that will rise in January if Congress cannot agree on a new deficit-reduction deal.

“The major development of the meeting was we made it clear our position is ... we should freeze tax rates for the middle class and raise rates on the top (income) families,” the Democratic aide said. “It was notable that neither Boehner nor McConnell shot that idea down.”

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