For the last few days leaders of both parties working toward an agreement. That will prevent a middle class tax -- from getting 98%. Of all Americans. Starting tomorrow. Preventing that tax hike has been my top priority. Because the last thing folks like. Folks up here on this stage can afford right now is to pay an extra 2000 dollars in taxes next year. Middle class families can't afford it. Businesses can't afford it. Our economy -- for. Today it appears that an agreement to prevent this New Year's tax hike. Is within sight. But it's not -- There are still issues left to resolve. But were hopeful that congress can get it up. But it's not done and so. Part of the reason that I want to speak to all of -- here today is to make sure that we have decides to congress and that. Members. Of both parties understand that all across America this is -- pressing concern. On people's minds. The potential agreement. That's being talked about we're not only make sure that taxes don't grow up on middle class families. It also that would extend tax credits for families with children. It would extend our tuition tax credit that's helped millions of families pay for college. It would extend tax credits for clean energy companies that are creating jobs and reducing our dependence on foreign oil. It would extend unemployment insurance to two million Americans. Who are out there are still actively looking for a job. I have to say that. Ever since I took office drug campaign. And over the last couple months. My preference would have been to solve all these problems in the context of a larger agreement. A bigger deal a grand bargain whatever you wanna call it. That solves our deficit problems in a balanced and responsible way that doesn't just deal with the taxes reduced spending. In a balanced way so that we can put all this behind us just focusing on. Roy and our economy. But -- this congress that was obviously a little too much to hope for at this time. It may be we. Can do what. In stages. We're gonna solve this problem instead in several steps. Last year 2011 we started reducing the deficit through one trillion dollars in spending cuts votes have already taken place. The agreement being worked on right now we're further reduce the deficit by asking the wealthiest. 2% of Americans pay higher taxes for the first time in two decades. So that would add. Additional hundreds of billions dollars to deficit reduction. So that's progress. But we're going to be -- You know keep in mind but just last month Republican congress that they would never agree to raise tax rates on the wealthiest Americans. Obviously you remember it's currently being discussed would raise those rates and raise them permanent. Now. But but but keep in mind. -- whatsoever or work to do we still have deficits that's be dealt with were still gonna have to. Think about how we put. Our economy on a long term trajectory of growth how we continue to make investments in things like education. Things like infrastructure. That help our economy grow. And keep in mind that. The threat of tax hikes going up is only one part of the so called fiscal cliff that are always been talking about. What we also have facing -- starting tomorrow. Are automatic spending cuts. That are scheduled to go into effect. And keep in mind that somebody spending cuts. The congress. Has said it will automatically go into effect. Have an impact on our Defense Department. But they also have an impact on things like that start. And so there some programs that are scheduled to be cut that. We're using. And -- instead of a scale. May not always be the smartest cuts. And so that is a piece of business that still has to be taken care. And I want to make clear. That any agreement we have to deal. -- -- these automatic spending cuts that are being threatened for next month. Those also have to be balanced as are my principles always been. Let's do things the balanced responsible way and that means the revenues have to be part of the equation. In turning off the sequester in limiting his automatic spending cuts. As well spending cuts. Now the same is true for any future deficit agreement. Obviously. We're gonna have to do more reduce our debt and our deficit I'm willing to do more but it's gonna have to be balanced we got to do it a balanced responsible way for example. I'm going to reduce our government's Medicare bills. But finding new ways to reduce the cost of health care in this country. That's something that we all should agree -- You know we wanna make sure that Medicare is there for future generations. But the current trajectory of helped -- cross is going up so -- We've got to find ways to make sure that it's sustainable. That kind of reform has to go hand in hand with -- more work to reform our tax code so that. Wealthy individuals the biggest corporations can't take advantage of loopholes and deductions. That aren't available to most of the folks standing up here. -- are available to most Americans. So there's still more work to be done. In the tax code to make it fair even as we're also looking at how we can strengthen something like Medicare. Now if Republicans think that. I will finish the job deficit reduction through spending cuts law and you hear that sometimes common for. The sort after today we're just gonna try to. -- Only spending cuts down. Well -- spending. -- spending cuts that is. That will hurt seniors. Or hurt students. Or hurt middle class families. Without asking. Also. Equivalent sacrifice. From. Millionaires -- Companies would -- lobbyists etc. if they think that's going to be the formula for how we solve this thing and they've got another -- cup. That's not how it's gonna work. We've got to do this they balanced and responsible way and if we're gonna be serious about deficit reduction in debt reduction. Than. It's gonna have to be a matter shared sacrifice. At least songs I'm president. And I'm going to be president for next four years I. -- But. Now for now our most immediate priority it is to stop. Taxes going up the middle class families. Starting tomorrow. I think that is a modest. Goal that we can accomplish. Democrats and Republicans in congress have to get this done. But they're not there yet. They are close but they're not there yet and one thing we can count on with -- respect do this congress is that. If there's even 12 left before you have to do what you're supposed to do. They would use that last second. So. So as this point it looks like government -- here in BC. And so you're the dollar going to be hanging out in DC to. I can come to your house. I don't -- spoke part. But the the people. Who are with me here today people were watching at home. They need are leaders in congress to succeed. They need us they need us all stay focused. On that. On politics. Not gone. A special interests maybe be focused on families. Students. -- -- You know folks that Wear out their work and really really hard. And are just looking for a fair shot. And some award for that hard work. They expect our leaders to succeed on their behalf. So why and so keep the pressure on. Over the next twelve hours or so let's see if we get this thing done. And I thank you all if I don't see if I don't -- up your house. Ought to wish everybody happy -- thank you very much. It. Wouldn't. Obama wishing everyone a happy new year streaking up the White House just ten hours before the fiscal clip takes effect. The president said progress is being made on preventing taxes going up on most Americans middle class families as he put it. He said it appears that an agreement is within sight but it's not done and there are still issues left to resolve he said were hopeful it can get done but it's not done yet. White House correspondent Peter -- what does the president say is in this tentative deal that shaping up. Well Howard the one thing he didn't do was go in to numbers he said they're close but not there yet on the attacks side of this. Mr. Obama admitting that the big deal the grand bargain that he originally wanted to and said he preferred. Is just not going to happen he said that it's something that just can't occur with this particular congress what really struck me about this. Was the campaign rally flavor to it you heard people with the game men's in the yeses in the crowd and he had beaming supporters. Behind him. And it looked like something you know if you turn the clock back a month or so two they -- last stages of the campaign affect the entire campaign itself. And the main message that the president had came at the very end. Keep the pressure on congress focus on is he put it families students grandmas and people looking for a fair shot. Let's quickly go to Capitol Hill Bob plus what are the sticking point here. Whether -- a couple of them and the president mentioned one which for those automatic spending cuts happen defense caps and other programs. He said it has to be done in part with tax hikes. Not just other spending cuts that is still a very difficult issue that is not resolved the -- apparently still holed up on doctors' Medicare fees. Which if nothing is done are gonna be cut about 30%. It's also not clear by the way that the deal currently shaping up if it's reached would even reduce the deficit at all. That that's we don't know those numbers yet but at the moment it's not all the way there spending seems to be the biggest obstacle. That's my post on Capitol Hill also with White House correspondent Peter -- Looks like we're still heading for that fiscal cliff this has been a CBS news special report. I'm Howard Cameron's been in Washington.