* Obama steps up public relations campaign for tax compromise
* Says deal on taxes would set stage for deficit reduction
* White House urges supporters to use Twitter to lobby lawmakers
By Mark Felsenthal
WASHINGTON, Nov 28 (Reuters) - President Barack Obama said on Wednesday he hoped to reach an agreement with Congress before Christmas to avoid the looming "fiscal cliff" and shrink the budget deficit, and ramped up efforts to rally the public to press Republicans for action.
Obama encouraged Americans to use Twitter - with the hashtag #My2K - and other social media to swamp their lawmakers with requests to act quickly to keep their tax rates low.
"Our ultimate goal is an agreement that gets our long-term deficit under control in a way that is fair and balanced," he said at the White House.
"I believe that both parties can agree on a framework that does that in the coming weeks. In fact, my hope is to get this done before Christmas," Obama said.
The president and congressional Republicans are negotiating how to avoid steep automatic tax hikes and deep spending cuts that will kick in soon unless they can reach a deal to avoid them. Obama, fresh from a successful re-election effort in which he campaigned heavily on raising taxes on the wealthy, has launched an aggressive public relations campaign to support his approach.
On Wednesday, he spoke to an audience of "middle class Americans" who he said would have roughly $2,000 less to spend if Congress fails to extend middle class tax rates that will automatically rise unless lawmakers act.
He went a step farther at a cabinet meeting later in the day, saying the tax rise would hurt the world economy.
While congressional Republicans have been willing to agree to increased revenues to achieve a broader deal to cut government red ink, they have generally been opposed to any tax rate increases. However, in recent days, some have indicated a willingness to agree to higher rates.
Obama noted that some of the resistance to his proposal is wavering.
"I'm glad to see - if you've been reading the papers lately - that more and more Republicans in Congress seem to be agreeing with this idea that we should have a balanced approach," he said.
For their part, Republican leaders are seeking to cut spending on social safety net programs, in particular the Medicare program that provides health insurance for the elderly, which they say is the key reason for yawning deficits. [ID:nL1E8MS7ZV}
The president said on Wednesday that a deal on taxes could lay the foundation for a broader deal.
"Now is the time for us to work on what we all agree to, which is let's keep middle-class taxes low," he said. "And if we get this part of it right, then a lot of the other issues surrounding deficit reduction in a fair and balanced and responsible way are going to be a whole lot easier."
The president called on his backers to pressure Congress both by traditional means and through social media. The White House has encouraged supporters to tweet how roughly $2,000 less in disposable income would hurt their spending.
"Do what it takes to communicate a sense of urgency. We don't have a lot of time here," Obama said.
The White House has used Twitter campaigns in the past to get the public to pressure Congress to lower student loan interest rates (#dontdoublemyrate) and on extending the payroll tax cut (#40dollars).
As part of his public relations campaign, Obama is due to meet with corporate executives at the White House later on Wednesday and to visit a toy manufacturer near Philadelphia on Friday.