WASHINGTON (AP) - President Barack Obama is kicking off budget dealings with congressional leaders with new leverage from last week's big win, but he confronts a tricky path to avoiding a market-rattling "fiscal cliff."
Obama's GOP rivals promise greater flexibility on new tax revenues, but Democrats face pressure from liberal interest groups urging him to take a hard line and avoid cutting big benefit programs like Medicare and food stamps. It's up to Obama to navigate the course toward an agreement.
At issue is a one-two punch of expiring Bush-era tax cuts and across-the-board spending cuts set to hit in January as punishment for the failure of a gridlocked Congress to reach a deficit-cutting deal last year.
Economists and business leaders warn the combination could send the economy back into recession.