A potential solution to the fiscal cliff is another elaborate process featuring considerable, politically unpopular changes to federal policies to compel Republicans and Democrats to agree to a broader fiscal package next year. 

In what has been described as a trigger to avoid the sequester, both sides would agree to establish benchmarks for entitlement and tax reform over the next year. If unmet, the agreement would activate sizable spending or entitlement cuts and revenue increases.

Given Washington and Wall Street’s frustration with the first sequestration process, the likelihood of a second is still uncertain. 

House Minority Leader Nancy Pelosi alluded to a lengthy process following Friday’s high-level White House meeting. “We should have a goal in terms of how much deficit reduction” said Pelosi. “We should show some milestones of success so that confidence can build as we reach our solution.”

Though neither of the congressional Democrats explicitly mentioned entitlements, Senate Majority Leader Harry Reid acknowledged that Democrats and Republicans are “going to have to give up some of the things that we know are a problem.”

A senior Democratic aide says a prerequisite for any such process is a tax rate increase on families earning more than $250,000. Even if Congress begins overhauling the entire tax code, the aide said Democrats want the rate hike on wealthier taxpayers secured immediately. 

Republican aides said their party will raise revenue through curbing tax deductions, but rate increases are off the table.

Rich Edson joined the FOX Business Network as a Washington correspondent in October 2007.