Fiscal Cliff

The fiscal cliff cometh. And, whether or not the House and Senate — with an assist from the White House — figure out some sort of stopgap(ish) way to avert going over the edge, one lesson is already crystal clear: Congress has failed.

Vice President Biden and Senate Minority Leader Mitch McConnell (R-Ky.) continued urgent talks Monday over a deal to avoid the “fiscal cliff after Democrats offered several significant concessions on taxes, including a proposal to raise rates only on earnings over $450,000 a year.

New Year's Eve dawned with no solution to Washington's budget impasse, setting up a 24-hour scramble to determine whether lawmakers could do what they've promised for months: engineer an alternative to the so-called fiscal cliff.

Senate Minority Leader Mitch McConnell (R-Ky.) and Vice President Joe Biden engaged in furious overnight negotiations to avert the fiscal cliff and made major progress toward a year-end tax deal, giving sudden hope to high-stakes talks that had been on the brink of collapse, according to sources familiar with the discussion.

Senate leaders on Sunday failed to produce a fiscal deal with just hours to go before large tax increases and spending cuts were to begin taking effect on New Years Day, despite a round of volatile negotiations over the weekend and an attempt by Vice President Joseph R. Biden Jr. to intervene.

Well, here we are. It's New Year's Eve and with just hours to go before the end of the year and the arrival of the so-called fiscal cliff, Democrats and Republicans in Washington are still trying to strike a deal that heads off automatic increases in taxes, automatic deep spending cuts in a variety of programs and the automatic expiration of some jobless benefits.

The White House and Senate Republicans sorted through stubborn disputes over taxing the wealthy and cutting the budget to pay for Democratic spending proposals as Monday's midnight deadline for an accord avoiding the "fiscal cliff" drew to within hours.

Capitol Hill negotiations to avert a fiscal crisis before the New Years deadline appeared to falter Sunday in the Senate, as lawmakers struggled to find common ground while bringing the country ever-closer to a 2013 shockwave of tax hikes and spending cuts.

Practically speaking, they likely have a "grace period" of a couple of weeks to pass a bill that wards off the bulk of scheduled tax increases and spending cuts without causing too much damage.

With only hours left Monday to avert what economists predict will be a one-two punch to the U.S. economy, Senate Democrats and Republicans were trying to negotiate a last-minute deal aimed at heading off a year-end combination of spending cuts and tax increases that could trigger a new recession.