'Fiscal Cliff' Negotiations: Ball Is in the GOP's Court

The White House and Congress are still unable to reach a deal with only 29 days left.
1:58 | 12/03/12

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Transcript for 'Fiscal Cliff' Negotiations: Ball Is in the GOP's Court
John, thanks very much. We're turning to the high stakes stalemate some washington over the fiscal cliff. Everyone's taxes go up. Massive spending cuts take hold after 29 days if the white house and congress can't reach a deal. And they are barely talking right now. Abc's jon karl has the latest. Good morning, jon. Good morning, george, with less than a month to go, the two sides are as far apart as they've ever been. Overnight, the president released a new campaign-style video aimed squarely at republicans. We need to get tax relief to working families. Reporter: This morning, about the only thing that the two sides agree on, going over the so-called fiscal cliff would be a big blow to the economy. It would be very damaging to average americans. There's no doubt about it. Going over the cliff will hurt our economy, will hurt our country it's not fair to the american people. Reporter: And a deal that would cut the deficit, almost everybody's income taxes will go UP JANUARY 1st. It's more than that, automatic cuts to defense, to medicare doctors to unemployment benefits, and that could mean another recession but -- right now, I would say we're nowhere. Period. Reporter: The white house is standing firm on taxes. Rates have to go up. Who's taxes are you going to raise? Rates are going to have go up on wealthy americans. Reporter: In addition to $1.6 trillion in tax hikes, the white house's latest includes $400 billion in unspecified medicare cuts and no limit on how much the government can borrow. The republican response? Flabbergasted. I looked at him, you can't be serious? Two prominent republicans told me that house republicans may ultimately give into the president on just extending the middle class tax cuts if they do that george, without a bigger deal on spending, the president would get nothing else and face another big battle earlier in the year over the debt level of what the government can borrow. To josh with the top stories. clinton has issued a new warning

This transcript has been automatically generated and may not be 100% accurate.

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