28 December 2012 Last updated at 17:16 ET

Fiscal cliff: Obama 'makes no new offer'

House Speaker John Boehner arrived at the White House ahead of a much-anticipated meeting

US President Barack Obama has used a last-ditch White House meeting to urge Congress to back an interim plan to avoid the "fiscal cliff", reports say.

He reportedly asked Republican and Democratic leaders to back tax cuts for those earning under $250,000.

They have only four days to reach an agreement before across-the-board tax rises and spending cuts take effect.

Analysts say sliding over the "cliff" could tip the US into recession and set back the global economic recovery.

There appeared to be no immediate resolution after the meeting, but Mr Obama is due to make a statement at 17:45 EST (22:45 GMT).

New optimism?

President Obama cut short his holiday in Hawaii to resume the negotiations. The Senate returned to work on Thursday, with the House due back on Sunday.

Reports ahead of the meeting suggested the president would propose a limited package including the renewal of most expiring tax cuts, and a delay or replacement of some spending cuts.

But as the meeting at the White House began, US media reported that the president was making no new offer, instead seeking a simple vote on extending tax cuts for middle class Americans.

What is the fiscal cliff?

• On 1 January 2013, tax increases and huge spending cuts are due to come into force - the so-called fiscal cliff
• Deadline was put in place in 2011 to force president and Congress to agree ways to save money over the next 10 years
• Fear is that raising taxes while massively cutting spending will have huge impact on households and businesses
• Experts believe it could push the US into recession, and have a global impact on growth

• What if the US goes over the cliff?
• Will the fiscal cliff affect you?
• Q&A: The US fiscal cliff
• Why is it called a 'fiscal cliff'?

There was no word on whether Republican House Speaker John Boehner and Senate minority leader Mitch McConnell were open to a deal or had a counter-offer.

Democratic Senate majority leader Harry Reid and senior House figure Nancy Pelosi were also at the White House.

Earlier, there was upbeat rhetoric from some senators.

"I'm getting a little more optimistic today. Sometimes it's darkest before the dawn and there are two good signs for optimism today," senior Democrat Chuck Schumer told NBC's Today show.

Republican Jon Kyl told Bloomberg News: "Everybody recognises we're either going to get something in the next few hours or not. There's no more posturing time left."

Mr Obama's plans to increase taxes on the wealthiest Americans have remained a point of division between the two parties since he won re-election in November.

Many Republicans oppose new taxes as a matter of principle, and are demanding cuts to what they see as deficit-inflating public spending, putting at risk healthcare and welfare benefit schemes popular with Democrats.

An alternative plan proposed by House Speaker John Boehner - which would have seen taxes rise only on those earning over $1m - failed in the House of Representatives late last week.

Mitch McConnell: No "blank cheque" to avert the fiscal cliff

Speaking on Thursday, the Democratic majority leader in the Senate, Harry Reid, said he thought a deal was unlikely. Later, Senate Republican leader Mitch McConnell said his colleagues were unwilling to sign a "blank cheque".

"Hopefully there is still time for an agreement of some kind that saves the taxpayers from a wholly preventable economic crisis."

In the Senate chamber on Thursday, Mr Reid said the requirement to get at least 60 of 100 votes to move to a vote on any legislation almost certainly doomed any new plan unless Republicans gave it strong backing.

"It looks like that [the fiscal cliff] is where we're headed," Mr Reid said.

Cuts and benefits

"It looks like that's where we're headed," Harry Reid said of the fiscal cliff

The term fiscal cliff refers to the combination of almost $600bn (£370bn) of tax rises and spending cuts due to come into force on 1 January if Congress does not pass new legislation.

Sweeping tax cuts passed during the presidency of George W Bush will expire, eventually affecting people of all income levels, and many businesses.

Other tax cuts and benefits to expire include:

• A 2010 payroll tax cut, the expiration of which would prompt immediate wage-packet cuts
• Benefits for the long-term unemployed
• Compensation for doctors treating patients on federal healthcare programmes
• Inheritance taxes are also likely to be affected if no deal is reached.

In addition, spending cuts mandated by a law passed to break a previous fiscal impasse in Congress will come into force, affecting both military and domestic budgets.

The cuts are expected to affect federal government departments and the defence sector, as well as hitting unemployment insurance and veterans' support.

How the Bush tax cuts were brought in
Tax year	1993-2000	2001	2002	2003-2008	2009-2012	2012 tax brackets	2013 scenarios
							Tax cuts expire	Tax cuts expire for top incomes
Source: Tax Foundation, IRS. Tax brackets shown for unmarried individuals
President	Bill Clinton	George W Bush			Barack Obama
Bottom rate	15%	10%	10%	10%	10%	Up to $8,700	15%	10%
		15%	15%	15%	15%	$8,700-$35,350		15%
	28%	27.5%	27%	25%	25%	$35,350- $85,650	28%	25%
	31%	30.5%	30%	28%	28%	$85,650- $178,650	31%	28%
	36%	35.5%	35%	33%	33%	$178,650-$388,350	36%	33% or 36%*
Top rate	39.6%	39.1%	38.6%	35%	35%	Over $388,350	39.6%	39.6%
*President Obama has previously called for the tax cut to expire for those earning over $250,000