Obama and Boehner each have proposed cutting deficits by more than $4 trillion in the next 10 years as part of a deal to avert the cliff, but they differ on how to get there. Economists have warned that failure to strike a deal could send the economy back into recession.

　　On Tuesday, Boehner rejected a White House proposal to shrink the amount of deficit reduction that comes from revenue to $1.4 trillion from $1.6 trillion over 10 years. Boehner has called for $800 billion in revenue through tax reform.

　　'A PRETTY FRANK CONVERSATION'

　　Boehner said Obama's plan did not do enough to reduce the federal deficit. "The president and I had a pretty frank conversation about just how far apart we are," he said of their Tuesday phone talk.

　　Carney ridiculed the Republican argument that sufficient revenue could be raised by closing tax loopholes or capping deductions. "Those magic beans are just beans, and that fairy dust is just dust," he said. "It is not serious."

　　Boehner has repeatedly offered gloomy assessments of the state of the talks in public, even as signs of progress have sprouted on Capitol Hill. The pace of staff-level talks has quickened in recent days as the two sides exchanged counter-offers that neither side said was sufficiently detailed.

　　The stubborn differences have dampened hopes of a potential deal before the Christmas holiday. "Keep your Christmas decorations up and make no plans" to leave Washington, was Boehner's advice in the closed-door meeting with Republicans, Representative John Shimkus of Illinois told reporters.

　　In exchange for more tax revenues, Republicans have demanded deep spending cuts in politically popular social entitlement programs like the government-funded Medicare and Medicaid healthcare plans.

　　House Democratic Leader Nancy Pelosi said that House Democrats objected to Republican efforts to raise the age when seniors become eligible for Medicare, which now stands at 65, as a way to cut government spending.

　　"Raising the retirement age does not get you that much money, so you're doing a bad thing when it comes to seniors, and you're not achieving your goal," she told CBS.

　　Senate Democratic leader Harry Reid said on Wednesday that Boehner and Republicans needed to make concessions on taxes. "To this point there hasn't been a lot of progress, and I'm very, very disappointed," he said on the Senate floor.

　　Financial markets have watched the negotiations with interest. JPMorgan Chase & Co CEO Jamie Dimon said the United States could have a "booming economy" in a couple of months if lawmakers in Washington reach agreement.

　　A budget deal could mean 4 percent economic growth and a drop in unemployment, Dimon said at a New York Times conference in New York. A deal would need to link any tax increases with spending cuts, he said.

　　"The table is set very well right now," Dimon said.

　　The stock market was closely following an announcement by the Federal Reserve of a new stimulus plan but the fiscal cliff was not far from investors' minds.