President Obama approaches 'fiscal cliff' days after victory

WASHINGTON - President Barack Obama will speak at the White House to set the tone for upcoming talks with congressional Republicans on avoiding the so-called fiscal cliff.

Republicans are drawing a line in the sand against higher tax rates for upper-income earners, seeking to topple the conventional wisdom that the just re-elected Democrat has the upper hand in upcoming negotiations.

The fiscal cliff is a potentially economy-crippling set of tax increases and automatic spending cuts due to hit in January.

Obama faces a tough, core decision: Does he pick a fight and risk a prolonged impasse with Republicans or does he rush to compromise and risk alienating Democrats still celebrating his victory?

Many of his Democratic allies hope Obama will take a hard line when he addresses the matter Friday.