Newly re-elected president Barack Obama has phoned the leaders of the US Congress to urge them to tackle the country's budget deficit together.
The Republican majority leader in the House of Representatives, John Boehner, said he was open to increasing government revenue, but again rejected Mr Obama's plans to raise taxes for high-income earners.
Mr Obama was re-elected president on Tuesday, defeating Republican challenger Mitt Romney.
The president has returned to Washington aware that that he has his work cut out - not least because Congress looks much as it did during the four years of bitter infighting and grinding deadlock that marked his first term, the BBC reports.
The Republicans have retained control of the House of Representatives. Both sides have struck a conciliatory note, with House Speaker John Boehner saying they must find common ground - but without compromising principles.
The main problem to be addressed is the so-called fiscal cliff in January 2013, when automatic spending cuts and tax increases worth $US600 billion are due to take effect.
The BBC reports Republicans want to see a general fall in federal spending to help reduce the budget deficit and the amount of money that the administration has to borrow to cover the shortfall.
Democrats also want to reduce the deficit, but favour doing so more through higher taxes, primarily on higher earners.
World share markets fell on Wednesday, as investors worried that the fiscal challenge facing Mr Obama could lead to a new recession.
In the US, markets plunged 2.4% on the prospect that Democrats and Republicans would fail to compromise to avert the austerity plan.
