With the U.S. economy showing more signs of improvement in its long recovery from recession, economists point to fears about higher taxes in 2013 as a potential threat to rising consumer confidence.
The impending fiscal cliff resulted from a failure to reach a deficit reduction agreement in the past two years due to long-standing differences between Democrats and Republicans on taxes -- particularly whether to extend tax cuts from President George W. Bush's administration.
Republicans seeking to shrink the size of government oppose allowing any tax rates to return to pre-cut levels, arguing that Obama's plan would hinder job growth because some small business owners who file personal returns would pay higher taxes under it.
Boehner and other influential GOP figures have declared their willingness to consider other ways to boost tax revenue as part of a broader deal that would include entitlement reforms and spending cuts.
Republicans insist Democrats must agree to cut discretionary spending and make significant reforms to Medicare and Social Security as part of a deficit reduction deal.
However, organized labor and other elements of the Democratic base oppose any major reforms to the popular entitlement programs. While some Democratic legislators express willingness to reform Medicare and Medicaid, they reject making Social Security reform part of the fiscal cliff negotiations, saying it is self-funded and therefore doesn't add to the deficit.
New polls this week, including one by CNN/ORC International, showed a solid majority of respondents supports the Democratic stance that any agreement should include a mix of spending cuts and tax increases. An ABC News/Washington Post survey showed a strong majority favoring the Obama tax proposal to raise tax rates on the wealthy.