This is it. The moment many have been dreading and warning would mark a worst-case-scenario for the nation is upon us as the hours tick by before January 1, when automatic tax increases and spending cuts will become a reality. President Obama and congressional leaders will meet this afternoon at 3 p.m. to talk over possible ways to avert the crisis. Don’t hold your breath. At this point, even a limited fiscal deal seems unlikely, notes the Associated Press, as the threat of another recession isn’t appearing to motivate party leaders to give in to the other side. In fact, they may very well see a benefit in going over the cliff.
Right now, it seems more likely that lawmakers will reach a retroactive deal sometime in January, points out Reuters. That doesn’t mean there won’t be a lot of theater in the coming days in what is only the fifth time since the 1930s that lawmakers have been forced to return to Washington between Christmas and the New Year’s Eve festivities, notes the Washington Post. But on Friday, all eyes will be on the White House, where President Obama and congressional leaders will meet for the first time since Nov. 16. Even lawmakers are pessimistic. "I don't know timewise how it can happen now," Senate Majority Leader Harry Reid said. For now President Obama has shifted focus away from the House and is reaching out to senators to strike a deal, points out the Hill, noting that the estate tax has now emerged as a key issue. Yet the evidence that either side is really itching for a deal is increasingly slim.
Even though both Democrats and Republicans have often talked about just how serious the fiscal cliff is, it seems many have come to the conclusion it’s better to go over “than swallow a raw deal,” writes Politico’s Jonathan Allen. Republicans likely see the benefit of blaming Obama for any tax hike and then voting to decrease taxes rather than raise them. That seems to be a blatant political ploy to try to avoid primary challenges in the future. Democrats aren’t too eager to compromise either, particularly when they consider that public opinion seems to be on their side.
If a deal were to be reached at this point, it will likely come from negotiations in the Senate, where Republicans seem to have agreed they might be able to accept a compromise that extends income tax rates for families who make up to $400,000 or $500,000 while also extending the 35-percent tax rate on inheritances over $5 million per spouse, a GOP lawmaker tells the Hill. It’s far from clear though whether liberal Democrats will go for the estate tax idea.
For now, lawmakers all seem to be able to agree on one thing at least: It sure stinks to be stuck in Washington over the holidays, points out the New York Times.