Obama July 25 2011 2
President Barack Obama. Reuters

President Barack Obama on Friday announced he will meet with congressional leaders from both sides next week to start negotiations on the impending “fiscal cliff.”

Obama said he has already put forward a detailed plan he is not wed to. But while indicating wiggle room, the president made clear he is not settling for anything that is unbalanced.

“I’m open to compromise,” he said. “I’m open to new ideas. I’m committed to solving our fiscal challenges, but I refuse to accept any approach that isn’t balanced.”

Reiterating that the majority of Americans support his approach to balancing the nation’s books, Obama said the top priority going forward has to be jobs and growth.

“It’s a plan to put people back to work, including our veterans,” Obama said. “It’s a plan to reduce our deficit in a balanced and responsible way.”

America’s national debt is currently $16 trillion and counting. The President reiterated that bipartisan work has already cut $1 trillion last year and that he intends to do more.

“We can't just cut our way to prosperity,” Obama said, standing by his position that the wealthy must pay more in taxes, as revenue must accompany spending cuts. For Obama, wealthy Americans are those single taxpayers who earn more than $200,000 a year and couples who have annual income exceeding $250,000.

What is not known at this time is whether certain entitlements are on the table. Both Democrats and Republicans, however, know that Americans need their leaders to sit, talk and come up with compromises that are in theirbest interests. The task right now is to get both sides of the aisle working together.

Obama warned that if Congress fails to agree at the end of the year, taxes will increase for everyone. The tax increases and automatic spending cuts are set to hit in January and both parties believe if this happen, the U.S. economy would be crippled.

"That makes no sense,” Obama said about everyone it with an increase. “It will be bad for our economy."

He later called for an extension of middle class tax cuts "right now."

With House Speaker John Boehner ready to talk, Obama said he is encouraged that a solution will be found.

"2013 should be the year we begin to solve our debt through tax reform and entitlement reform,” Boehner said.

However, Republicans have been sticking to the narrative they've held for years, that raising tax rates on wealthy Americans is "unacceptable." Still, Boehner has put the ball in Obama's court, saying he's ready to be lead.

The Congressional Budget Office has warned that under current law, taxes will increase by more than $400 billion next year and that spending cuts coupled with the already planned tax increases could cause a recession. Moreover, these increases and cuts would cause the unemployment rate to jump to 9.1 percent by the fourth quarter of 2013.