WASHINGTON -- Washington politicians have one month to step back from the so-called "fiscal cliff," across-the-board tax hikes and austerity-driven spending cuts likely to return the country to recession, and a top Republican declares there has been no real progress after two weeks of talks between President Barack Obama and a divided Congress.

The president has called for settling the issue before Christmas and headed Friday to Pennsylvania to campaign for his demand that any deal include higher tax rates on U.S. couples earning more than $250,000 a year.

He also wants to keep in place the smaller tax burden that lower income earners have had for about a decade.

Republican House Speaker John Boehner argued that Obama's latest offer -- to raise revenue by $1.6 trillion over the next decade -- would be a "crippling blow" to an economy that is still struggling to find its footing. The Ohio Republican told reporters he would continue working with Obama on the issue but gave a gloomy assessment of the talks so far.

"There's a stalemate. Let's not kid ourselves," Boehner said. "Right now, we're almost nowhere."

Democrats have said that any delay was the fault of Republicans who refuse to accept Obama's call to raise tax rates on the richest Americans.

"There can be no deal without rates on top earners going up," White House press secretary Jay Carney said Thursday.

The austerity measures that automatically would take effect Jan. 1 unless a deal is made is the looming punishment for Washington's inability, or unwillingness, in recent years to deal decisively with the country's spending far more than it has been taking in.

Politicians in both major U.S. parties are showing no signs of giving up on the deep partisan divisions that have crippled legislative action in Washington despite Obama's strong victory for a second White House term.

White House officials believe Obama's trip Friday would build momentum for his case, even as Republicans describe it as an irritant and an obstacle to productive talks. Obama insists on higher taxes for the top 2 per cent of earners and casts Republicans as an obstacle to a deal. Republicans have said they are open to new tax revenue but not higher rates.

Obama said both sides need to "get out of our comfort zones" to reach an agreement.

Obama toured and spoke at the Rodon Group manufacturing facility, showcasing the company as an example of a business that depends on middle-class consumers during the holiday season. The company manufactures parts for K'NEX Brands, a construction toy company.

The uncertainty over whether the U.S. can resolve the critical budget deadlock is beginning to increase jitters in stock markets in Europe, where eurozone countries have already returned to recessionary economies.

European investor sentiment had been buoyed this week by upbeat reports on the U.S. economy, including economic growth and consumer confidence. But markets failed to sustain their rally Friday as trading became increasingly focused on the difficult talks between the White House and Congress.

Economists warn that sending the U.S. economy over the "fiscal cliff" would trigger a recession and cause a spike in already stubbornly high unemployment.

To avoid the danger, Obama and Congress are hoping to devise a plan that can reduce future deficits by as much as $4 trillion in a decade, cancel the tax increases and automatic spending cuts and expand the government's ability to borrow beyond the current limit of $16.4 trillion.

Officials on Thursday said the White House is seeking $1.6 trillion in higher taxes over a decade and an immediate infusion of money to aid the jobless and help hard-pressed homeowners.

In exchange, the officials said, Obama would support an unspecified amount of spending cuts this year, to be followed by legislation in 2013 producing savings of as much as $400 billion from popular benefit programs over a decade.

In political terms, the White House proposal are nearly opposite what Republicans earlier lay down as their first offer, including a permanent extension of income tax cuts at all levels.

Senate Majority Leader Harry Reid told reporters, "We're still waiting for a serious offer from Republicans."

The White House also circulated a memo that said closing tax loopholes and limiting tax deductions -- a preferred Republican alternative to Obama's call to raise high-end tax rates -- would be likely to depress charitable donations and wind up leading to a middle-class tax increase in the near future.