U.S. President Barack Obama has asked congressional leaders to convene Friday at the White House for last-minute talks on a "fiscal cliff" deal that avoids automatic tax increases and broad spending cuts that threaten the economy's nascent recovery.

The development capped a day of growing urgency in which Obama returned early from a Hawaiian holiday and planned to meet with top members of Congress just four days before the government goes over the so-called fiscal cliff if no deal is reached.

The bitter partisan fight is over reining in deficit spending by raising taxes for some wealthy earners — the Democrats' priority — and cutting some popular benefit programs, as demanded by Republicans.

As the Senate reconvened Thursday, Senate Majority Leader Harry Reid warned that the U.S. appeared to be headed over the year-end "fiscal cliff" with no deal in sight. He also slammed House of Representatives Speaker John Boehner for not immediately reconvening the House. Boehner called the House back into session for a highly unusual Sunday evening session.

White House to host meeting

Friday's meeting would be the first time Obama has huddled with all the leaders of Congress since Nov. 16 and would represent that last hope for a deal before the year-end deadline. Obama spoke to each leader individually Wednesday.

Administration officials confirmed the Friday meeting at the White House in a bare-bones announcement that said the president would "host a meeting."

An aide to Senate Republican Leader Mitch McConnell said he "is eager to hear from the president."

A spokesman for Boehner issued a statement that said the speaker would attend and "continue to stress that the House has already passed legislation to avert the entire fiscal cliff and now the Senate must act."

While there was no guarantee of a compromise, Republicans and Democrats said privately that elements of any agreement would likely include an extension of middle class tax cuts with increased rates at upper incomes as well as cancellation of the scheduled spending cuts. An extension of expiring unemployment benefits, a reprieve for doctors who face a cut in payments from the federal Medicare program and possibly a short-term measure to prevent dairy prices from soaring could also become part of a year-end bill, they said.

Efforts to prevent the U.S. economy from going over a fiscal cliff stirred back to life with less than a week to go before potentially disastrous tax hikes and spending cuts kick in. (Mary F. Calvert/Reuters)

That would postpone politically contentious disputes over spending cuts for 2013.

The issue has been Obama's first test of muscle after his re-election in November. At stake are Bush-era tax cuts that expire on Dec. 31 and revert to the higher rates in place during the administration of President Bill Clinton in the 1990s. Nearly all Americans and branches of the federal government, including the military, would be affected.

The parties are also arguing about cutting entitlement programs like Social Security pensions. The changes are part of a long-delayed need for the government to address its chronic deficit spending.

Obama ran on a theme of having the wealthy pay a greater share toward deficit reduction with a focus on raising upper tax rates for individuals earning $200,000 or more and couples making more than $250,000. In negotiations with Boehner toward a deficit reduction plan, he offered to increase that threshold to $400,000, but those negotiations collapsed.

Boehner countered with his own plan to let taxes rise for anyone earning more than $1 million, but even that was too far for conservative House Republicans who rebelled and doomed the bill last week.

Top Senate leaders said they remain ready to seek a last-minute agreement. Yet there was no legislation pending and no sign of negotiations in either the House or the Senate on a bill

Public opinion has sagged under the weight of the negotiations. Consumer confidence fell to its lowest monthly level since August, largely on concerns over the fiscal cliff, the Conference Board reported Thursday.

The market was glum, with stocks falling for the fourth day in a row amid the stalled negotiations and a report that consumer confidence had plunged to its lowest level since August.

In addition, Treasury Secretary Timothy Geithner told Congress on Wednesday that the government would hit its borrowing limit on Monday, the final day of the year. He said he would take "extraordinary measures as authorized by law" to postpone a government default. But he said uncertainty over the outcome of the fiscal cliff negotiations made it difficult to determine how much time those measures would buy.

Geithner's news on the government about to hit its $16.4 trillion borrowing limit has brought more pressure to the process. Obama wants an increase in the borrowing limit as part of any agreement to avoid the fiscal cliff, but Republicans want concessions in return.