They basically are still not on the same page, but maybe a little bit closer, because revenue is now on the table. 

 

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It sounds so final: going over the cliff. And this particular case sets the US economy potentially driving right over the so-called fiscal cliff on Jan. 1st. The fiscal cliff is the combination of automatic spending cuts and expiration of the Bush era tax cuts. And most analysts agree it would propel the US into recession,  but are there winds of change and hope even given the balance of power in Washington remains the same? I spoke to CNN Money's Jeanne Sahadi earlier about where the cliff and efforts to avoid it stand now. 

 

So Jeanne, take it since what going over the cliff would mean for Americans under tax bills, so many analysts are saying to the typical middle-class family it's a hike about 2-3 thousand dollars.

 

Yes, that's right, estimates from the nonpartisan tax policy center, you know, someone making between 14,000 and 15,000 might see about a $2,000 increase, someone making 65,000 might see something closer to 3,500, but you know, on average for everyone, it's about 3,500. And tax polls center also estimates that about 88% of Americans would see some tax increase next year. If the lawmakers allow the fiscal cliff to take effect and do nothing to avert it or reverse the policies. So basically what's gonna happen is the Bush tax cuts are gonna expire, the temporary payroll tax cut that everyone has enjoyed for the last 2 years, it was part of a stimulate effort, that expires. The alternative minimum tax, which is technically a welfare tax that's only supposed to hit rich people, it's set up so poorly, in the tax code that every year Congress has to go back and make an adjustment so that the middle class doesn't get hit by it, the only problem is they haven't made an adjustment for tax year 2012, so in January, people are gonna start filing their 2012 tax returns, and they are going to be caught by the AMT unless Congree, which everyone expects they will do, unless Congress goes back and creats a so called AMT patch to protect the middle class from having to pay it. So this is the 3 big reasons why your tax bill may go up in 2013.

 

And of course, with the election in the rear view mirror, President Obama in the White House for another 4 years, the issue is how will this upcoming battle on the fiscal cliff be reshaped and for his part, House Speaker John Boehner said this yesterday, Jeanne.

Because the American people expect us to find common ground where we are in to accept additonal revenues, the tax reform.

So Jeanne, take it since the details of what Speaker Boehner is offering or suggesting? 

 

A couple of things, one, it's step forward for Republicans to stand up and say, yes we are willing to offer more revenue than the current system raises, it's another step for them to say, yes we are willing to use revenue to reduce deficits, both of those are requirements that Democrats have put on the table. However, only when they get that new revenue in a very prescribed way, so what House Speaker Biller was saying yesterday is we are happy to give you some revenue, we are happy to use it for deficits reduction, but it's gotta be in this way, we are not going to do it the way you want it, which is President Obama wants to raise the top 2 income tax rates on hign income people, so they basically are still not on the same page, but maybe a little bit closer because revenue is now on the table.

 

So when we pull out from Washington and look at the big picture here, Americans want to from leadership in the White House and in Congress, is there really an opening for compromise here?

 

Well, compromise is a matter of political will, so there is always informal compromise, and you know, ideally you don't do it, so that only one side has to blink or suck it up. You wanted to do it in a way that both sides feel like they want something, there are a lot moving dials in these negotiations, with Speaker Boehner saying, hey, we are willing to cap tax breaks on people to raise revenue, that's also something President Obama has proposed, so maybe they find some common ground there, on one thinks they are gonna make one and done deal with the fiscal cliff, they have like, something like 16 legislative days to get this done, so what a lot of people think is gonna happen, at the best that can happen is that they will come up with a bridge deal, something that averts the fiscal cliff and the negative economic effects that can have, people say if we are to let it go into effect, gone into recession, but that also makes a down payment on deficit reduction, and that can come through spending cuts, that can come through revenue increases or tax rating increases, there is no reason they can compromise the question as will they, jury though.