Fresh from his re-election triumph, President Barack Obama has called leaders in congress to prepare the ground for a political showdown over a cresting financial crisis that could spark recession.
Obama's calls represent the president's first post-election intervention in a political imbroglio known as the "fiscal cliff," a year-end perfect storm of a budget crunch and expiring tax cuts.
Shares on Wall Street dropped sharply overnight on fears that partisan bickering would prevent compromise. The S&P 500 index fell below a key level for the first time in two months. Bank and defence stocks fell on a sell-off by investors who had bought those sectors in hopes Republican Mitt Romney would win.
The president spoke to Speaker John Boehner, after his Republicans retained control of the House of Representatives in Tuesday's election, and also telephoned the minority Republican leader in the Senate, Mitch McConnell.
The White House said Obama also spoke to Democratic allies Harry Reid, who leads the Senate Democratic majority, and Nancy Pelosi, head of minority Democrats in the House, the White House said.
"The president reiterated his commitment to finding bipartisan solutions to: reduce our deficit in a balanced way, cut taxes for middle-class families and small businesses and create jobs," White House spokesman Jay Carney said.
Carney said in a statement that Obama believed Americans sent a message to Washington by returning him for a second term on Tuesday, that both parties should put aside partisan interests to put the economy first.
Congress is under intense pressure to tackle the fiscal cliff, a combination of automatic tax hikes and spending cuts that are due to come into force on January 1 if no agreement is reached on budget legislation.
Obama campaigned for re-election on the idea that the wealthiest Americans should pay higher taxes, and will feel he has a mandate for such an approach.
Republicans, however, flatly refuse to countenance any tax hikes and insist on cuts to spending on social programs that many Democrats cherish.
Boehner drew a line in the sand on Tuesday night even before Obama's win was sealed.
"The American people want solutions - and tonight, they've responded by renewing our House Republican majority," Boehner said.
"With this vote, the American people have also made clear that there is no mandate for raising tax rates."
Economists have warned that sudden tax rises and spending cuts that choke the government could tip the slowly recovering US economy back into recession, so the political stakes surrounding the fiscal cliff could not be higher.
The president placed the calls from Chicago, where he stayed at his home in the Hyde Park area following his election night party, before returning to the White House later on Wednesday.