WASHINGTON — President Barack Obama is kicking off budget dealings with congressional leaders with new leverage from last week's big win, but he confronts a decidedly tricky path to avoiding a market-rattling "fiscal cliff" that could imperil a still-fragile economy.

Obama's GOP rivals promise greater flexibility on new tax revenues, but Democrats face pressure from liberal interest groups urging the president to take a hard line and avoid cutting big benefit programs like Medicare and food stamps. It's up to Obama to navigate the course toward an agreement.

At issue is a one-two punch of expiring Bush-era tax reductions and across-the-board spending cuts set to hit in January as punishment for the failure of a gridlocked Congress to reach a deficit-cutting deal last year. Economists and business leaders warn the combination could send the economy back into recession, and all sides in Washington say they want to avoid going over the cliff.