Posturing escalates before work begins on "fiscal cliff"

Updated 11:30 a.m. ET

Talk tough but don't box yourself in. That seems to be the strategy that both sides are taking regarding the debate over taxes and the "fiscal cliff." The two main players, President Obama and House Speaker John Boehner, traded barbs - albeit soft barbs - ahead of their first face-to-face meeting on the issue scheduled for Friday.

"Listen, there are a lot of issues on the table that have to be resolved by the end of the year. I think I've laid out a reasonable framework where both parties can work together and I am looking forward to running down to the White House on Friday and beginning that conversation," Boehner said Wednesday shortly after House Republicans reelected him as Speaker of the House.

Boehner's framework rejects the president's central tenet: raise taxes on the wealthy. In Mr. Obama's first news conference since Election Day - and his first since March - the president offered a solution Wednesday to temporarily preventing the fiscal cliff: extend the expiring tax cuts on those making less than $250,000.

"Step number one that we can take in the next couple of weeks - provide certainty to middle class families, 98 percent of families who make less than $250,000 a year - 97 percent of small businesses - that their taxes will not go up a single dime next year. Give them that certainty right now," Mr. Obama said.

If the president's plan passed, tax rates would remain the same for most Americans, but for those in the highest tax bracket, rates would raise from 35 percent to 39.6 percent.

Leaving subtleties behind, Senate Republican Leader Mitch McConnell took to the Senate floor Thursday morning to slam a proposal recently floated by the White House that would increase taxes on the wealthy and corporations by $1.6 trillion.

"And let's be clear, an opening bid of $1.6 trillion in new taxes just isn't serious. It's more than Simpson-Bowles or any other bipartisan commission has called for," McConnell said. "It's twice as much as the white house seemed ready to agree to during last summer's debt ceiling talks."

"Listen, there are ways to put revenue on the table without increasing tax rates," Boehner reiterated.

As the country faces deep, automatic spending cuts that would cut social programs and defense and steep tax increases, Washington has less than two months to prevent the bottle neck of policies set to go into effect at the beginning of the year.

But central to the discussion is revenue. Republicans maintain their insistence against raising taxes on anyone but have conceded that the federal government can find additional revenue in other areas of the tax code, perhaps through closing loopholes and deductions. Democrats, meanwhile, insist that the massive deficit can not be closed without increasing taxes on the wealthy.

In an effort to put pressure on Republicans to move toward his position, Mr. Obama and his advisers have spent a better part of the week gaining consensus on his tax proposal. They have met at the White House with groups outside of government and leaders in the business community.

"If the last debt ceiling discussion was playing with fire, this time they're playing with nitroglycerin," Honeywell CEO David Cote told CNBC. But as a benefactor of lower taxes, he did not offer any specifics on what policies he and other CEOs would get behind or oppose.

The president also met with progressive and labor leaders earlier in the week who are aggressively pursing higher taxes on the wealthy.

"Our millions of members are fired up and ready to go, and are taking the fight to Republicans who are holding middle class taxpayers hostage to win another tax cut for the rich," Moveon.org Executive Director Pedro Morillas.

Advisers to the president are meeting with a coalition of self-described millionaires today, several of whom are prominent Democrats, who are advocating on the side of higher taxes. And Vice President Biden is meeting with a dozen mayors from across the country today whose cities would be impacted by the fiscal cliff.

The first leg of formal negotiations begin tomorrow when House and Senate leaders travel 16 blocks down Pennsylvania Avenue to the White House for a bipartisan meeting.

While Mr. Obama and Boehner publicly stand by their demands, they are both simultaneously offering willingness to negotiate.

"There's all kind of information and data, but getting into specifics of that at this point would not be conducive to trying to get an agreement with the White House," Boehner told reporters Wednesday.

"This is just a matter of whether or not we come together and go ahead and say Democrats and Republicans, we're both gonna hold hands and do what's right for the American people, and I hope that's what happens," the president said.