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Obama says fiscal-cliff deal on taxes 'in sight' but not done yet

President Obama on Monday said a deal to prevent middle class tax rates from rising is now “in sight” but is “not done” yet.

Obama made the remarks in an appearance from the White House broadcast on cable networks that was designed to raise pressure on lawmakers as they work to reach a last-second deal on a fiscal cliff deal.

“It appears an agreement to prevent new year's tax hikes is within sight but it's not done," Obama said. “There are still issues left to resolve but we're hopeful that Congress can get it done. But it's not done.”

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The president spoke before people the White House identified as middle class taxpayers, and the appearance had the feel of a campaign event. Obama’s audience applauded his shots at Congress and Republicans, and the president cast himself as being on the side of middle class taxpayers who can’t understand why Congress hasn’t taken action on fiscal issues.

Obama said his preference would have been to resolve the fiscal crisis as part of a so-called grand bargain “that solves our deficit problems in a balanced and responsible way” and didn't just deal with taxes alone.

“But with this Congress that was obviously a little too much to hope for at this time, Obama said to laughter from the crowd in the White House's South Auditorium. Maybe we can do it in stages. We're gonna solve this problem instead in several steps.”

A moment later, he continued that if Republicans think they can “Shove spending cuts at us...then they've got another thing coming.

He issued a stern warning to the GOP, telling lawmakers that deficit reduction can't only be achieved through spending cuts alone.

“You hear that sometimes coming from them-- that sort of after today we're just gonna try to shove only spending cuts down, well,” Obama began to more laughter from the audience, taking a brief pause.

“That's not how it's going to work,” he said. “We've gotta do this in a balanced and responsible way and if we're going to be serious about deficit reduction and debt reduction then it's going to have to be a matter of shared sacrifice, at least as long as I am president and I am going to be president for the next four years.”

Republicans expressed outrage over the remarks, warning Obama had hurt prospects for a deal.

“I just listened to the president and my heart is still pounding,” Sen. Bob Corker (R-Tenn.) said on the Senate floor.

“I was very disappointed to hear what the president had to say in front of a prep rally," he said. “I know the president has fun heckling Congress, but I think he probably lost a number of votes with this.”

Sen. John McCain (R-Ariz.) said he couldn't understand why Obama would mock Republicans in the midst of delicate talks.

"What did the President of the United States just do" McCain said. "He sent a message of confrontation to Republicans."

"I guess I have to wonder, and the American people have to wonder, whether the president really wants this resolved," McCain said.

Obama's comments also provoked howls from the GOP on Twitter, with several Republican operatives raising questions about why he would hit the GOP as Vice President Biden and Senate GOP Leader Mitch McConnell (Ky.) appear to be closing in on a deal to prevent looming tax hikes and spending cuts set to begin in January.

A senior GOP aide said McConnell and Biden have agreed that tax rates should be extended for individuals with annual income less than $400,000 and for households with income under $450,000.

In his remarks at the White House, Obama said preventing the tax hike has “been my top priority.”

“The last thing folks like the folks up here on this stage can afford right now is to pay an extra $2,000 in taxes next year. Middle class families can't afford it, businesses can't afford it. Our economy can't afford it.”

Obama said the deal being ironed out would extend unemployment insurance to 2 million people looking for work, along with tax credits for families with children and would extend a tuition tax credit.

What to do with the spending cuts set to hit the government remains a sticking point, Obama said.

“That is a piece of business that still needs to be taken care of,” Obama said.

This story was posted at 1:51 p.m. and updatd at 2:43 p.m.