UPDATE 1-U.S. Senate leaders aim to craft 'fiscal cliff' bill by Sunday

David Lawder and Rachelle Younglai
Reuters Middle East

WASHINGTON, Dec 28 (Reuters) - U.S. Senate leaders are

working to craft legislation by Sunday that averts the year-end

"fiscal cliff" of tax hikes and spending cuts, but many details

needed to be worked out after a crucial meeting with President

Barack Obama on Friday.

U.S. Senate Democratic leader Harry Reid and his Republican

counterpart Mitch McConnell, termed the meeting "constructive"

and "positive" and said they would keep working on trying to

find a solution over the weekend.

After adjourning on Friday, Reid he would probably not call

the Senate back into session until about 1 p.m. EST/ 1800 GMT on

Sunday to give leaders time to hash out a deal.

"We are engaged in discusssions, the majority leader and

myself and the White House, in the hopes that we can come

forward as early as Sunday and have a recommendation that I can

make to my conference and the majority leader can make to his

conference," McConnell said on the Senate floor.

"So we'll be working hard to try to see if we can get there

in the next 24 hours. So I'm hopeful and optimistic," he added.

An aide to House of Representatives Speaker John Boehner

said it was agreed at the White House meeting that the Senate

should act first.

"The speaker told the president that if the Senate amends

the House-passed legislation and sends back a plan, the House

will consider it - either by accepting or amending," the aide


However, Reid said it would be difficult to craft a solution

that can win passage in both the House and Senate, adding that

it involves "big numbers."

"Whatever we come up with is going to be imperfect," Reid

said. "Some people aren't going to like it. Some people will

like it less. But that's where we are and I feel confident that

we have an obligation to do the best we can."

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