'Major Progress' In Deal to Avoid Fiscal Cliff

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With scant hours left before the United States plunges over the "fiscal cliff," Senate leaders are racing against the clock to reach a deal that the House and Senate can approve on New Year's Eve.

All hope is not lost, however: Politico is reporting that Vice President Joe Biden and Republican Senate Minority Leader Mitch McConnell "engaged in furious overnight negotiations to avert the fiscal cliff," making "major progress" in the negotiations. Biden was called in on Sunday after talks between Senate Majority Leader Harry Reid and McConnell hit a major setback during weekend negotiations. Though the two planned to reach a deal before 3 p.m. on Sunday, their deadline came and went without agreement.

The Senate and House are expected to reconvene this morning. The House on Sunday positioned itself to vote immediately on any legislation that will pass the Senate, waiving its usual three-day rule to consider a deal from the upper chamber.

The main hurdle remains which income groups will be hit with adjusted tax hikes in the new year. While Democrats proposed raising taxes on people who make more than $360,000 annually, and families who make more than $450,000, McConnell countered with a tax hike for individuals above $450,000 and couples who earn more than $550,000.

The New York Times faulted both parties for the last-minute negotiations:

"Members of both parties have become increasingly addicted to short-term solutions to long-term problems, cobbling together two- and three-month bills and short term extensions to fight over again and again until the string has run out on many major pressing issues."

However, President Barack Obama, speaking in a rare appearance on weekend political talk show Meet the Press, placed the blame squarely on Republicans:

"They say that their biggest priority is making sure that we deal with the deficit in a serious way, but the way they're behaving is that their only priority is making sure that tax breaks for the wealthiest Americans are protected. That seems to be their only overriding, unifying theme."

If Congress is unable to make a deal, 88 percent of Americans will see their taxes rise on Jan 1, and approximately 2 million long-term unemployed people will lose their benefits.

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