So just where are we on the fiscal cliff? After Mitch McConnell and Harry Reid hit an impasse yesterday, McConnell called in Joe Biden, and after a flurry of offers that included President Obama and went throughout the night, Politico finds "major progress" and reason for hope this morning. Still, the Senate recessed at 7:27pm and won't be in session until 11am today, notes the Hill.
- The top sticking points: Both sides want to stop billions in automatic spending cuts—the sequester—but differ on how to offset them, notes the Hill. Democrats have raised their tax-hike threshold to $450,000 per family, but McConnell wants $550,000, notes CNN. There's also disagreement over the estate tax, which Republicans want to keep at 35%, exempting inheritances under $5 million.
- What if we get a deal? John Boehner has vowed to put any deal to a vote, and either pass it or amend it and send it back to the Senate.
- What if we don't? Democrats could push through a tax-rate extension for those making less than $250,000 plus jobless benefit extensions, but Senate Republicans could call for 60 votes to pass the measure, which still wouldn't address the sequester, Politico notes. Anything that gets through the Senate could get an immediate House vote, the Hill adds—but House passage of such a bill would appear unlikely.
- How did we get here in the first place? It's no big surprise, observes the New York Times, thanks to short-term patches used by both parties to gain leverage. First, it was the Republicans with the threat of government shutdown and the debt ceiling; now, it's the newly victorious Dems prying the GOP away from its tax commitments. All those short-term plans are now coming to a head.
- Is anyone smiling in this mess? Well, Boehner finally scored applause from his party last night for his negotiating, despite House Republicans' earlier rejection of his efforts.
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