After a brutally divisive presidential campaign and two years of acrimony over the federal budget, the nation's leaders joined hands Friday and pledged fast and far-reaching action to tame the public debt and avoid economy-shaking tax hikes set to hit in January.

In a display of bipartisanship unseen since the GOP captured the House in 2010, Republican and Democratic leaders met for more than an hour with President Obama at the White House. They emerged unified, with a message of reassurance for nervous taxpayers and investors — though intense haggling over the shape of a deal is yet to come.

“I feel very good about what we were able to talk about in there,” Senate Majority Leader Harry M. Reid (D-Nev.) told reporters outside the White House, standing shoulder-to-shoulder with Republicans John A. Boehner (Ohio), the House speaker, and Mitch McConnell (Ky.), the Senate minority leader, as well as House Democratic leader Nancy Pelosi (Calif.). “We all know something has to be done. There is no more ‘Let’s do it some other time.’ We’re going to do it now.”

The usually sharp-tongued McConnell even praised Obama for his upcoming trip to Southeast Asia, although it will take the president away from Washington as policymakers rush to reach an agreement to avert $500 billion in tax hikes and automatic spending cuts that threaten to throw the nation back into recession early next year.

“I can only echo the observations of the other leaders, that it was a constructive meeting,” McConnell said. “We all understand where we are.”

What going over the 'fiscal cliff' would mean . . .

Major details — including the overall scope of a debt-reduction package — still have to be worked out. And the group made no progress Friday on their most fundamental point of disagreement: whether to extend the expiring George W. Bush-era tax cuts for the wealthiest 2 percent of U.S. households through 2013.

But the leaders expressed optimism about reaching an accord before the cliff hits in January and dispatched staffers to draft a debt-reduction framework to present to Obama after the Thanksgiving break. Pelosi called on her colleagues to set a Christmas deadline for passing legislation to “send a message of confidence to consumers, to the markets.”

U.S. stocks shot up while the leaders were speaking, going from negative to positive territory in a matter of minutes. The Dow Jones industrial average rose 113 points, gaining nearly 1 percent, in the half hour after the meeting ended. (The Dow closed up nearly 46 points, or 0.4 percent.)

The upbeat tone marked a dramatic shift from the sullen relations of recent years, when Obama and a GOP fortified by anti-
government activists clashed repeatedly over spending and taxes. For months, Washington lurched from crisis to crisis as Republicans threatened to shutter the government and prohibit additional borrowing unless Democrats agreed to massive cuts in spending.

In 2011, a potential “grand bargain” between Boehner and Obama collapsed in angry finger-pointing and dueling news conferences. This year, a presidential campaign fueled by hundreds of millions of dollars in negative ads painted Obama as a free-spending redistributionist and the Republican standard-bearer, Mitt Romney, as an out-of-touch corporate robber baron.

Since Nov. 6, when Obama won reelection and Democrats made gains in the House and Senate on a pledge to make the rich “pay their fair share,” Republicans have backed down from the fight. On Friday, McConnell and Boehner acknowledged the need for fresh revenue to restrain a public debt that has swollen to dangerous levels — as long as Democrats agree to tackle the rising cost of Medicare and Medicaid, the biggest drivers of future borrowing.

“To show our seriousness, we’ve put revenue on the table,” Boehner said. But “it’s going to be incumbent for my colleagues to show the American people that we’re serious about cutting spending and solving our fiscal dilemma.”

By all accounts, Obama and congressional leaders made progress on both fronts. During a meeting in the Roosevelt Room that included Treasury Secretary Timothy F. Geithner and White House economic adviser Gene Sperling, Obama acknowledged the need to tackle health-care spending, according to aides in both parties.

And while Boehner argued that the economy would suffer if policymakers failed to maintain the Bush-era tax cuts for households at all income levels, Democrats said he did not insist that his caucus would reject any rise in the top tax rates, as he has in the past.

“The tone was very good,” Geithner said afterward on Bloomberg TV. “They said what you’d hope for them to say at this point, which is that [an agreement] is something we can do, we’re committed to do it, we want to do it as soon as we can, we know the stakes are very high.”

While Obama is out of the country, the leaders said, their staffs will get to work on a framework to replace the year-end fiscal cliff with a less abrupt and less economically-damaging debt-reduction plan. The savings would be generated in two stages. The first would be a down payment composed of immediate tax hikes and spending cuts to replace blunt, across-the-board budget cuts set in motion during the 2011 debt-limit fight. The second would be a mechanism to force an overhaul of the tax code and long-term changes to entitlement programs next year.

“What we’re trying to do is to come up with a framework agreement that sets up a process for locking in long-term savings,” Geithner said. “But you have to do a meaningful amount of things upfront.”

Pelosi told reporters after the meeting that the leaders did not discuss an overall savings target. But, she said, “I think it would be good if we did something in the $4 trillion category” — a figure that could stabilize the debt as a percentage of the economy.

“My hope is that this is going to be the beginning of a fruitful process where we’re able to come to an agreement that will reduce our deficit in a balanced way,” Obama said as the meeting convened. Then he dismissed reporters, before remembering “one other point that I wanted to make”: Boehner’s birthday is Saturday.

But “we’re not going to embarrass him with a cake,” Obama said, “because we didn’t know how many candles were needed.”

Boehner, who is turning 63, playfully poked the president in the arm, and the two laughed and shook hands.

Amy Gardner contributed to this report.