Obama Kicks Off Budget Talks

President Obama “is kicking off budget dealings with congressional leaders with new leverage from last week’s big win, but he confronts a decidedly tricky path to avoiding a market-rattling ‘fiscal cliff’ that could imperil a still-fragile economy,” USA Today reports.

“Obama’s GOP rivals promise greater flexibility on new tax revenues, but Democrats face pressure from liberal interest groups urging the president 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.”

New York Times: “After years of wrangling, members of the bipartisan group of senators known as the Gang of Eight are ratcheting back expectations for a deficit reduction breakthrough and now say the best they can probably do is offer ideas for the one fiscal negotiation that will truly matter: talks between President Obama and Speaker John A. Boehner that begin in earnest on Friday.”

Wonk Wire: Another U.S. credit downgrade looms.