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The Fiscal Cliff

With Bob Oakes in for Tom Ashbrook

We’ll get the latest on the fast-approaching fiscal cliff.

Red lights illuminate Pennsylvania Avenue as the U.S. Capitol glows in the twilight, in Washington, Wednesday, Dec. 19, 2012, as talks continue on the looming fiscal cliff. (AP)

Red lights illuminate Pennsylvania Avenue as the U.S. Capitol glows in the twilight, in Washington, Wednesday, Dec. 19, 2012, as talks continue on the looming fiscal cliff. (AP)

Forget the bottles of bubbly and champagne toasts; Washington isn’t in a party mood this New Year’s Eve.

When the clock strikes midnight, the country could plunge over the fiscal cliff. Extended unemployment benefits cut. Payroll taxes up. Markets on edge. And more pain to come.

So, what’s it going to take to make a deal? Is this really how the New Year will start?

It’s down to the wire with fingers crossed, tempers high, and the outcome anyone’s guess.

-Karen  Shiffman

Guests

Margaret Talev, White House correspondent for Bloomberg News.

Chuck Babington, covers Congress for the Associated Press.

Alice Rivlin, senior Fellow in Economic Studies at the Brookings Institution.

From The Reading List

New York Times “Senate leaders and their aides began searching on Saturday for a formula to extend tax cuts for most Americans that could win bipartisan support in the Senate and final approval in the divided House by the new year, hoping to prevent large tax increases and budget cuts that could threaten the fragile economy.”

Politico “Tennessee Sens. Bob Corker and Lamar Alexander pitched a plan on Friday to cut federal spending by $1 trillion — much of it from Medicare — in exchange for increasing the nation’s borrowing limit by that amount. The plan would raise the Medicare eligibly age to 67 and require wealthier Medicare users to pay higher premiums. Treasury Secretary Tim Geithner has estimated extraordinary measures can push the necessity of Congress addressing the debt ceiling until perhaps February.”

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