—The expiration of Bush-era tax cuts on income, investments, married couples and families with children and inheritances.
—A $55 billion, 9 percent cut to the Pentagon next year and another $55 billion in cuts to domestic programs, including a 2 percent cut to Medicare providers.
—The expiration of unemployment benefits for the long-term jobless and a sharp cut in reimbursements for doctors participating in Medicare.
—The expiration of Obama's temporary 2 percentage point cut in payroll taxes.
—The imposition of the alternative minimum tax on some 26 million households, which would raise their taxes by an average of $3,700.
Last week, Obama got a head start by making a bipartisan call to Republican leadership in Congress, while proceeding to call for a tax hike on those making more than $250,000 per year.
There are 53 days left to find a solution that stops taxes from going up on 140 million American families and helps us reduce our nation's deficits in a smart and responsible way.
And that's what brought President Obama to the East Room of the White House this afternoon -- where he laid out his strategy for finding the right approach to move the country forward.
"I’m committed to solving our fiscal challenges," he said. "But I refuse to accept any approach that isn’t balanced. I am not going to ask students and seniors and middle-class families to pay down the entire deficit while people like me, making over $250,000, aren’t asked to pay a dime more in taxes. I'm not going to do that."
In the days and weeks ahead, the President plans to reach out to members of Congress, labor and business leaders, and citizens from all walks of life to gather ideas and input.
In fact, next week, he's invited leaders from both parties to come to the White House to begin discussing solutions. But he intends for those conversations to unfold with a minimal amount of drama.
"What the American people are looking for is cooperation," he said. "They're looking for consensus. They're looking for common sense. Most of all, they want action. I intend to deliver for them in my second term, and I expect to find willing partners in both parties to make that happen."
Senator Majority Leader Harry Reid called Obama's reelection a "mandate" to raise taxes and has said he wants a quick deal on the fiscal cliff:
“The president campaigned around the country saying, ‘We know what the problems are with this fiscal problem. We just need some revenue,’” Reid said. “That was the issue. The mandate was look at all the exit polls, look at all the polling, the vast majority of the American people, rich, poor, everybody agrees that the rich — richest of the rich have to help a little bit.”
With Washington facing potentially devastating tax hikes and spending cuts in less than two months, Reid said he was not in favor of punting until the next Congress by passing a short-term extension.
“I’m not for kicking the can down the road,” said Reid, who spoke with Obama Tuesday night. “I think we’ve done that far too much. I think we know what the issue is. We need to solve that issue. Waiting for a month, six weeks, six months, that’s not gonna solve the problem. We know what needs to be done. I think that we should just roll up our sleeves and get it done.”
In response to Obama's demands, Speaker John Boehner said a tax hike is "unacceptable" but is willing to close loopholes to increase revenue.
Raising tax rates is "unacceptable" to House Speaker John Boehner as he prepares to open negotiations on the looming "fiscal cliff" with the president and congressional Democrats, he told "World News" anchor Diane Sawyer today in an exclusive interview.
"Raising tax rates is unacceptable," Boehner, R-Ohio, said in his first broadcast interview since the election Tuesday.
"Frankly, it couldn't even pass the House. I'm not sure it could pass the Senate."
That stance could set up a real showdown with the White House given that the president has said he would veto any deal that does not allow tax cuts for the rich to expire. But the speaker said that Republicans would put new tax revenue on the table as leaders work toward a deal.
"I would do that if the president was serious about solving our spending problem and trying to secure our entitlement programs," Boehner said. "If you're increasing taxes on small-business people, it's the wrong approach."
Senate Minority Leader Mitch McConnell gave a clear message just after the election that Senate Republicans will not be voting for any kind of tax increase, but like Boehner is willing to close tax loopholes to increase revenue.
As Senate Minority Leader Mitch McConnell sits for an interview in his Capitol office 48 hours after the election, one thing is certain: He is in no way chastened by Tuesday's results. If Mr. Obama wants fiscal hand-to-hand combat, he will get it.
"Let me put it very clearly," says the five-term Republican senator from Kentucky. "I am not willing to raise taxes to turn off the sequester. Period." On Jan. 1, Washington faces both a huge tax increase and an automatic spending cut known as the "sequester," which could tip the economy back into recession. A newly emboldened President Obama is likely to take his soak-the-rich case straight to the people, I remind the senator. The political pressure to capitulate could become intense.
"Look, he may think it would be helpful to his presidency to continue to divide and demonize us," says Mr. McConnell. "But my answer will still be short and firm: No. We won't agree to any tax increases that will hurt the economy."
This isn't to say that next week, when the lame-duck congressional session begins to negotiate some kind of budget solution, taxes are off the table. Mr. McConnell is a realist. Republicans are willing to be "flexible" on raising revenues but, he hastens to add, only "in the context of broad-based, comprehensive tax reform." He's open to prying more out of the rich by closing tax loopholes. But he and his caucus of 45 Republicans want lower, not higher, rates.
There are many scenarios that can take place in the next 50 days, here are a few basics to start:
1) House Republicans will cave on raising taxes, so long as significant spending cuts are made or if there are serious promises made to reform entitlements
2) House Republicans don't cave on taxes, but in return give Obama and Democrats an increase in the debt ceiling, which we will hit as early as December (but Jay Carney has already said Obama will veto any deal that doesn't include the $250,000 per year tax hike)
3) Both parties will make a deal to stop sequestration
Sources say Leader Nancy Pelosi will be resigning her position as early as this week, but will stay in power until Obama's second term officially starts in January. Rep. Steny Hoyer, Rep. James Clyburn and Rep. Louise Slaughter will fight to take her place, with Hoyer being the most likely replacement. Members of Congress will meet at the White House this week to negotiate a path forward, dragging on until at least Christmas before a deal is finished.