President Obama is flying back to DC today to continue work on the fiscal cliff, but my understanding of the calendar is that we're basically out of time already. To enact a big tax and spending bill, you'd first need agreement amongst the principals. Then aides would have to write it up in more precise legal language, and it'd have to be scored and sold to key members of congress. That's really a "deal before Christmas if you want to be finished by the New Year" scenario and we're not there.
But there's still valuable work to be done. For one thing, Democrats and Republicans can talk about what bills they might like to pass in January once we're using the new baseline. But there's also the option of kicking the can.
Recall that the cliff is an entirely political crisis. There's zero pressure from bond markets or inflation expectations for a deficit reduction deal. It'd be totally fine in economic terms to just delay everything two or four more years. Pete Peterson would cry and it would make all the politicians look ridiculous, but it would work. More realistically, there are lots of options for smaller kicks of the can. If Obama and John Boehner feel that they're close a deal, they could ask congress to approve a two week can-kick to give them more time. Liberals will probably feel, however, that any mini-kick disadvantages them. Given how close we are to locking the new baseline into place, and given the extent to which the GOP is already taking the blame for there being no deal it looks pretty tempting from that perspective to just start negotiating anew on Jan. 2.