With only hours remaining before the first deadline of the so-called “fiscal cliff” hits, Washington leaders have reportedly made progress on a plan to avoid the automatic spending cuts and tax increases, but no deal is in sight. And, insiders say, a resolution is unlikely to appear before midnight tonight.
On Friday, President Barack Obama met with top Republican lawmakers to try to finalize an 11th-hour deal but produced no agreement. Yesterday, a special Sunday session of Congress likewise closed with no deal in place.
However, anonymous insiders have said that Vice President Joe Biden and Senate Minority Leader Mitch McConnell (R-Ky.) met late into the evening on Sunday to work on a deal. The Associated Press describes provisions including Republicans pulling off the table earlier demands to reform the way Social Security changes with inflation and a Democratic concession to not raise taxes on individuals with annual incomes exceeding $400,000 and families earning at least $450,000 — as opposed to previous demands to raise taxes on individuals making at least $200,000 a year and families earning at least $250,000.
AP also mentioned “a provision to prevent a spike in milk prices with the new year, extend unemployment benefits due to expire and protect doctors who treat Medicare patients from a 27 percent cut in fees.”
As of this writing, no concrete deals or announcements have been made, and it seems all but too late for a deadline deal to avert the fiscal cliff. As AP notes, “there [is] no expectation that a compromise could be approved by both houses by midnight [tonight], even if one were agreed to.”
For a summary of the fiscal cliff’s automatic spending cuts and tax increases, see the primer by the Council on Foreign Relations. Of particular importance for manufacturers are planned defense spending cuts, which could greatly impact their business in 2013.
Update at 2:00 p.m. E.T.: President Barack Obama made a live television address this afternoon to announce that Republicans and Democrats are “close” to a fiscal cliff deal but offered no more details. He stated that he might make another announcement later in the day if a deal is reached in the next ten hours.