Fiscal Cliff Talks: President Obama 'Modestly Optimistic'


"In an effort to get the president to agree to cut spending -- which is the problem -- I put revenues on the table last year, and I put them on the table again last month," he wrote. "Republicans made every effort to reach the 'balanced' deficit agreement that the president promised the American people, while the president has continued to insist on a package skewed dramatically in favor of higher taxes that would destroy jobs."

McConnell's office issued this response to the NBC appearance: "While the President was taping those discordant remarks yesterday, Sen. McConnell was in the office working to bring Republicans and Democrats together on a solution. Discussions continue today."

Regardless of outcome, talk of a comprehensive budget deal is gone and any bill would likely set up a series of smaller partisan roadblocks in the weeks and months to come. For example, if any hypothetical legislation managed to dodge tax increases for the middle class it may still not address the looming debt ceiling, which Treasury can avoid using accounting tricks for approximately two months.

A small deal may also not address the estate tax, another central point of the brinkmanship. Republicans want to leave that rate -- currently 35 percent -- as-is after exempting the first $5 million in estate value. Meanwhile, Democrats have called for a 45 percent tax after a $3.5 million exemption. Should negotiations fail, it would climb to 55 percent after a $1 million exemption after the New Year.

The Associated Press contributed to this report.

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