By Justin Sink and Russell Berman - 11/16/12 06:54 PM EST
Congressional leaders emerged Friday from the White House saying their initial meeting on the “fiscal cliff” with President Obama had been a “constructive” first step.
The lawmakers offered no details on their discussions to avert major tax hikes and spending cuts that could cripple the economy in January, but Republican leaders signaled a flexibility on higher taxes while Democrats said they could agree to spending cuts.
The four all appeared outside the White House after the meeting as a group to telegraph their seriousness and unity to the markets and the public.
“We all know something has to be done ... we feel very comfortable with each other and this isn't something we're going to wait until the last day of December to get it done,” Reid (D-Nev.) said. “We have a plan. We're going to move forward on it.”
Boehner said the parties had developed the "cornerstones of being able to work something out."
"It is going to be incumbent for my colleagues to show the American people that we're serious about cutting spending and solving our fiscal dilemma," Boehner said. "I believe that we can do this and avert the fiscal cliff that right in front of us today."
As the leaders spoke, major stock indexes jumped — a sign investors were encouraged by what they were hearing.
Reid said leaders and aides would work throughout the Thanksgiving recess and meet again with the president when lawmakers return from their break.
Congress leaves for the recess on Friday, and is scheduled to return the week of Nov. 26.
Pelosi said in the meeting she focused “on how we send a message of confidence to consumers, to the markets in the short run.”
“We should have a deadline before Christmas,” the California lawmaker said. “We should show some milestones of success so that confidence can build as we reach our solution.”
Boehner said the group had “outlined a framework” for a compromise deal, and that the GOP was willing to “put revenue on the table, as long as it's accompanied by a significant spending cut.”
McConnell, who said earlier in the week that he remained opposed to the idea of raising taxes on wealthier Americans, said Friday that his membership's support for new revenues was conditional upon entitlement reform.
“You can't save the country until you have entitlement programs that fit the demographics of the changing America and the coming years and we're prepared to put revenue on the table, provided we fix the real problem, even though most of my members — I think, without exception — believe we're in the dilemma we're in not because we tax too little but because we spend too much,” McConnell said.
Democrats, meanwhile, expressed a willingness to consider spending cuts despite heavy lobbying from union and senior groups, who argue Medicare and Social Security should not be touched.
"We understand our responsibility there. We understand that it has to be about cuts," Pelosi said.
But the Democratic leader said discussions about spending cuts must be done "in a way that promotes growth and supports the future."
Boehner’s office said the Speaker “formally offered” to the president a framework for a two-step process along the lines of what he presented in a public speech the day after the elections.
“He said Republicans recognize neither side is going to get everything it wants, and noted Republicans have put revenue on the table to demonstrate their seriousness about finding common ground,” Boehner’s office said in a readout of the meeting.
Under the Speaker’s framework, the White House and congressional leaders would use the next several weeks to agree to specific “targets” for revenue and savings through entitlement reforms. Boehner has said repeatedly that tax and entitlement reforms are too complex to complete this year, and he reiterated that in the meeting.
“Once we settle on those targets, the Speaker proposed, we can create simple mechanisms, in statute, that would achieve those revenue and spending goals,” Boehner’s office said. “They would be in place unless or until more thoughtful policies replace them.”
With the president leaving for a trip to Asia, they agreed that staff discussions would begin immediately, with the goal of presenting a framework to Obama and congressional leaders after Thanksgiving.
Boehner’s office did not disclose whether he specified numbers in the meeting, or whether he made clear what he believes the legislative mechanisms for achieving revenue and spending goals should be.
In the past, lawmakers discussed creating an expedited process for tax and entitlement reform that could force votes in Congress and possibly steer clear of a Senate filibuster.
Congress has struggled to stick to its own timelines before, however. The automatic sequestration cuts set to take effect this year were designed to force action, but now leaders are talking about creating yet another enforcement mechanism in 2013.
The hour-long meeting in the Roosevelt Room began on a friendly note, with Obama congratulating Boehner on his 63rd birthday and presenting the House Speaker with a bottle of red wine.
The friendly gesture drew a laugh and a firm handshake from the Speaker as leaders began the first negotiating session over the looming fiscal cliff.
The relationship between Obama and Boehner could be the key to whether the talks succeed. The two men tried to strike a "grand bargain" on the deficit last summer, only to have a public falling out when the talks unraveled. Obama complained that Boehner had left him at the altar, while the Speaker accused the president of "moving the goalposts" on the terms of the deal.
Before the meeting Friday, the president said the American people were looking for "action."
"That's an agenda that Democrats and Republicans and independents, people all across the country share," Obama said. "So our challenge is to make sure that we are able to cooperate together, work together, find some common ground, make some tough compromises, build some consensus to do the people's business."
—This story was posted at 12:33 p.m. and updated at 1:54 p.m.