With the deadline at the end of December, the stakes are not only political, but for most Americans, financial.
Democrats and Republicans seem determined to skate perilously close to the edge of the year-end "fiscal cliff." They're sticking to their guns for now while offering just enough wiggle room to hint at a last-minute compromise.
It's just a matter of who blinks first.
Both sides have aggressively laid down opening demands for budget talks that begin Friday at the White House.
President Barack Obama would raise taxes on households with annual incomes over $250,000. Republicans wouldn't — and insist federal deficits must be restrained mostly by federal spending cuts, including benefit programs.
Neither side wants to see the government go over the cliff on Jan. 1 - when a mountain of tax breaks expire and automatic spending cuts kick in, absent congressional action. That could hurl the economy back into recession.
"I'm open to new ideas," said Obama, fresh from his re-election victory. House Speaker John Boehner sees a new "spirit of cooperation."
Thus, Republicans say they could accept some increase in tax revenues — but only by trimming deductions and loopholes. And Democrats are OK with more spending restraint — so long as benefit programs like Medicare and Social Security are protected.
It's a dangerous game.
Voters mostly blamed Republicans for a 1995 government shutdown during a budget impasse with President Bill Clinton.
A post-election Pew Research Center poll shows 53 percent would blame congressional Republicans if no deal is reached by Dec. 31 — compared to 29 percent who'd blame Obama.
The cliff is just over six weeks off — including Thanksgiving and Christmas holidays. Obama, touring New York storm damage Thursday, leaves Saturday on a four-day Asia trip.
"Time is running out," says House Budget Chairman Dave Camp, R-Mich.
Veteran budget analyst Stan Collender says avoiding the cliff is "less of an imperative for Democrats now than it was before" the election and that "we're more likely to go off the cliff than to avoid it."