Fiscal Cliff Showdown - Running To Stand Still (The Note)

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By MICHAEL FALCONE ( @michaelpfalcone ) and AMY WALTER ( @amyewalter )


  • SUSAN RICE VS. THE GOP: After a face-to-face meeting on Capitol Hill yesterday, GOP Senators including John McCain clashed once again with U.S. Ambassador to the United Nations Susan Rice over what she said about the attack on the U.S. consulate in Benghazi, Libya in the days that followed. ABC's Jonathan Karl reported for "Good Morning America" today that sources inside the meeting say Rice acknowledged that some of what she said publicly after the attack turned out not to be true, but that she was presenting evidence that came directly from the Central Intelligence Agency. The Senators responded by accusing both her and the CIA of covering up the truth about the attack for political reasons - a charge that Rice forcefully denied, as did acting CIA director Mike Morell, who also attended the meeting. WATCH:
  • INSIDE THE MCCAIN-GRAHAM-AYOTTE ALLIANCE: Joining Sen. John McCain and yesterday's meeting with Rice were his long-time counterpart, Sen. Lindsey Graham, R-S.C., who has also been an outspoken critic of Susan Rice's handling of Benghazi, as well as a fairly new face when it comes to foreign policy: Sen. Kelly Ayotte, R-N.H. In fact, Ayotte has stood by her two more senior Senate colleagues throughout the Rice debacle. ABC New Political Director Amy Walter asked about the McCain-Graham-Ayotte alliance on Twitter last night and got lots of responses suggesting that the two men wanted a female for balance and that the New Hampshire senator was looking for a chance to get some foreign policy credentials to position herself for a 2016 run. And here's what James Pindell, New Hampshire political expert and WMUR contributor says of her reason for teaming up with the two amigos: "Kelly Ayotte is dancing with the one who took her to the ball. Outside of the NRSC itself, John McCain was Ayotte's biggest outside backer in a primary she only won by 1,500 votes against a conservative insurgent and two self-funding millionaires. McCain invited her to Pheonix for a major fundraiser, introduced her to bundlers, and campaigned with her at town hall meetings in New Hampshire, where he is a two time winner of competitive primaries. Ayotte came to the Senate without ever working in Washington before, not even as a hill staffer. She also had never been elected to anything before. She needed others to help her navigate the place and McCain took her under his wing. Because of McCain and Mitt Romney her profile has risen to the point where most Washington pundits can correctly pronounce her name now."
  • HELP WANTED - TOP CABINET VACANCIES ABOUND: Susan Rice she has told people that she has no idea whether or not President Obama will nominate her to succeed Hillary Clinton as Secretary of State. And friends of Clinton say that they expect her to leave immediately after the President's first term is over in early January. But Secretary of State is not the only critical cabinet vacancy. In addition to the opening at the CIA as a result of Petraeus's resignation, Defense Secretary Leon Panetta is also expected to leave. ABC's Martha Raddatz noted on "Good Morning America," that all of these vacancies are happening at a critical time when there are a lot of hot spots bubbling up. Iran is trying to acquire a nuclear weapon, there are new satellite photos showing North Korea would like to try to test another long range ballistic missile, and it's a critical time in Afghanistan as the administration attempts to put together plans for what the U.S. does there after 2014. WATCH:
  • POLL: AMONG CLIFF-AVOIDANCE OPTIONS, MOST FAVOR TARGETING THE WEALTHY. With the fiscal cliff drawing closer, raising taxes on wealthy Americans remains a popular option according to the latest ABC News-Washington Post poll. And, as ABC pollster Gary Langer notes, while the public divides closely on reducing federal income tax deductions, two-thirds oppose another possibility - raising the age for Medicare eligibility. Sixty percent in this new poll support raising taxes on incomes more than $250,000 a year, long a popular option overall, but also a divisive one: While 73 percent of Democrats and 63 percent of independents are in favor, far fewer Republicans, 39 percent, agree. Results of this poll echo the national exit poll in the presidential election, in which, given other options, 40 percent of Mitt Romney's supporters favored raising taxes either on the wealthy (28 percent) or on all Americans (12 percent). That rose to 79 percent among Obama's supporters - 66 percent favoring a tax hike on the well-off, 13 percent on everyone. POLL:


Both Democrats and Republicans are doing lots of posturing and preening as the clock ticks down to the Dec. 31 fiscal cliff deadline, but Congressional insiders say at this stage, the game right now is all about hurry-up-and-wait.

Brad Dayspring, the former communications director for Rep. Eric Cantor. R-Va., and current director of Young Guns Action Network, cautions that we shouldn't expect to see any real work to get done until the week of December 10.

And most veteran Capitol Hill watchers we talk to don't expect to see a deal reached until right before Christmas. In fact, many others who are less optimistic expect to ring in the New Year in the Capitol.

It shouldn't come as a shock. If there's one thing we know about Congress it's this: Nothing gets done until the very last minute.

Former Wyoming Republican Sen. Alan K. Simpson, who co-chaired a 2010 bi-partisan fiscal commission, predicted exactly that yesterday.

"They're going to react right down to the last point when there's going to be blood and hair and eyeballs all over the floor and they're going to come up with something," Simpson said in an interview on Tuesday MSNBC's "Hardball," "but let me tell you, if it's just kicking the can down the road, the can is now a 55 gallon drum filled with explosives. You can't play that game anymore."

As The New York Times' Jackie Calmes writes this morning, Simpson and his Democratic counterpart, Erskine Bowles, "have been on the road, sometimes solo but often together, perfecting a sort of Off Broadway show that has kept their panel's recommendations alive."

Today Bowles plans to meet privately with House Speaker John Boehner and key Republicans leaders on Capitol Hill.

An eleventh hour deal is nothing new in Washington. As The Hill's Russell Berman and Erik Wasson noted, "For the fourth consecutive year, a major Washington negotiation is on a collision course with Christmas":

"In 2009, the Senate stayed in session until the early morning of Christmas Eve to pass an initial version of the healthcare overhaul. The next year, Congress gave final approval to a lame-duck tax package on Dec. 16, and in 2011, House Republicans held out until Dec. 23 before approving - by unanimous consent - a two-month extension of a payroll tax cut."

SIMPSON-BOWLES' SECOND STAR TURN. More from The New York Times' Jackie Calmes on the efforts of Erskine Bowles and Alan Simpson to keep alive the two-year-old work of their debt commission: "That so many people from Bellevue, Wash., to Sanibel Island, Fla., and from Waterville, Me., to Dana Point, Calif., talk about 'Simpson-Bowles' (or 'Bowles-Simpson') as if it is shorthand for the solution to the nation's fiscal woes - even though few know its devilish details on tax increases and spending cuts - is testament to the men's indefatigable efforts. … On Tuesday, Mr. Bowles and corporate executives he helped recruit to a "Fix the Debt" campaign met privately at the White House with six senior administration officials, including Treasury Secretary Timothy F. Geithner. The commission's report 'could have just been put into the dustbin,' said David M. Cote, the chief executive of Honeywell and a panel member. 'Instead,' Mr. Cote added, 'it's become the basis for all of this discussion.'"

GROVER NORQUIST SAYS THE TAX PLEDGE IS FOREVER. In the latest episode of his ABC/Yahoo! Power Players series "Spinners & Winners" ABC's Jonathan Karl talks to the man behind the plan: Grover Norquist that is. The 'Taxpayer Protection Pledge' has been signed by virtually every Republican office holder over the last 20 years, binding congressman, senators, and governors to promise no tax increases of any kind, ever. "I think that people should keep their commitment to voters. I think they need to if they get elected with an open promise, they should keep that promise to voters," says the founder of Americans for Tax Reform. With about a third of incoming freshman Republicans dodging the pledge, the majority of the Republican House has now either not signed the pledge or disavowed it. But Norquist insists this is not the end.


with ABC's Elizabeth Hartfield ( @LizHartfield)

GOP LAWMAKERS STILL TROUBLED BY SUSAN RICE. The three Republicans, Sens. John McCain of Arizona, Lindsey Graham of South Carolina and Kelly Ayotte of New Hampshire, said not only did U.S. Ambassador to the United Nations Susan Rice, who was joined at a meeting with them yesterday by Acting CIA Director Mike Morell, not answer all their questions about the attack, she did little to assuage their overall worries. "We are significantly troubled by many of the answers that we got, and some that we didn't get concerning evidence that was overwhelming leading up to the attack on the consulate," McCain said. "The concerns I have are greater today than before, and we're not even close to getting the basic answers," Graham said. Ayotte said that in yesterday's meeting Rice called the information she first gave to the American people wrong. "It's certainly clear from the beginning that we knew that those with ties to al Qaeda were involved in the attack on the embassy, and clearly the impression that was given, the information given to the American people, was wrong," Ayotte said.

NOTED: RICE RESPONDS. in a statement following the meeting Susan Rice said: "We explained that the talking points provided by the intelligence community, and the initial assessment upon which they were based, were incorrect in a key respect: There was no protest or demonstration in Benghazi. While, we certainly wish that we had had perfect information just days after the terrorist attack, as is often the case, the intelligence assessment has evolved. We stressed that neither I nor anyone else in the administration intended to mislead the American people at any stage in this process, and the administration updated Congress and the American people as our assessments evolved."

TOP HOUSE REPUBLICAN TOM COLE: JOIN WITH OBAMA ON QUICK DEAL. Politico's Jonathan Allen reports: "Republican Rep. Tom Cole urged colleagues in a private session Tuesday to vote to extend the Bush tax rates for all but the highest earners before the end of the year - and to battle over the rest later. The Oklahoma Republican said in an interview with POLITICO that he believes such a vote would not violate Grover Norquist's anti-tax pledge and that he's not alone within Republican circles."

DURBIN WANTS NO ENTITLEMENTS IN 'FISCAL CLIFF' DEAL. Medicare and Medicaid savings should be part of future debt-reduction efforts, but not on the table in talks regarding the impending "fiscal cliff," the second-highest ranking Democrat in the Senate said on Tuesday. ABC's Matt Larotonda reports, in the prepared remarks of Sen. Richard Durbin's speech to the liberal Center for American Progress, he writes that progressives cannot "pretend" the programs can "continue forever" without changes to ensure their solvency. But the majority whip from Illinois insists that any adjustments should come after the immediate budget is passed.

OBAMA MOUNTS PUBLIC RELATIONS EFFORT TO AVOID 'FISCAL CLIFF.' The Washington Post's David Nakamura and Zachary Goldfarb report: "The White House signaled Tuesday that it will try to marshal the momentum from President Obama's reelection triumph into another victory at the negotiating table, launching a full-fledged public relations effort to avoid a 'fiscal cliff' that could jolt the nation back toward recession. Administration officials said Obama will hit the road this week for a campaign-style series of events with ordinary Americans, including a visit to a toy manufacturer in suburban Philadelphia on Friday. That trip and others will be aimed at increasing pressure on Congress to reach an agreement on heading off a series of automatic spending cuts and tax increases that are scheduled to begin in January."

MORGAN STANLEY CEO ENLISTS EMPLOYEES TO PRESSURE CONGRESS. "Morgan Stanley Chief Executive James Gorman enlisted his employees to pressure Congress to reach a bipartisan deficit-reduction deal, one of the most high-profile in a series of moves by major corporations seeking to influence the course of negotiations," the Wall Street Journal Carol E. Lee reports. "Mr. Gorman, in an email Tuesday, asked Morgan Stanley 's more than 16,000 U.S. financial advisers and branch managers to contact their members of Congress and urge them to reach 'a bipartisan compromise' to avoid a year-end budget crisis known as the 'fiscal cliff.' 'No issue is more critical right now for the U.S. economy, the global financial markets and the financial well-being of our clients, which is why I am asking you to participate in the democratic process and make your voice heard,' Mr. Gorman wrote. Mr. Gorman's email doesn't mention any Washington figures or parties, but does employ President Barack Obama's rhetoric in calling for a 'balanced solution' to the looming fiscal crisis."

SENATE DEMOCRATS DIVIDED OVER ENTITLEMENT CUTS. "Deep divisions among Senate Democrats over whether cuts to popular benefit programs like Medicare and Medicaid should be part of a plan to slow the government's mushrooming debt pose a big obstacle to a deal for avoiding a potentially economy-crushing 'fiscal cliff,' even if Republicans agree to raise taxes," notes the Associated Press' Stephen Ohlemacher. "Much of the focus during negotiations seeking an alternative to $671 billion in automatic tax increases and spending cuts beginning in January has centered on whether Republicans would agree to raising taxes on the wealthy. President Barack Obama has insisted repeatedly that tax increases on the wealthy must be part of any deal, even as White House officials concede that government benefit programs will have to be in the package too."

THE BATTLE FOR NEW JERSEY. A new Quinnipiac University poll out today finds that "New Jersey voters say 67 - 25 percent that Gov. Christopher Christie deserves reelection in 2013 and give him leads of 18 point or more against any possible Democratic challenger … The only group opposed to Gov. Christie's reelection is Democrats, by a narrow 46 - 41 percent, the independent Quinnipiac University poll finds." The governor's leads potential Democratic challenger Newark Mayor Cory Booker 53 to 35 percent. According to Quinnipiac, "Booker dominates a possible Democratic primary with 41 percent, followed by [State Sen. Richard] Codey with 12 percent. No other candidate tops 4 percent."

BOB DOLE HOSPITALIZED. Former Senate Republican Leader and presidential nominee Bob Dole was hospitalized at Walter Reed Army Medical Hospital reports ABC's Sunlen Miller. Dole's hospitalization was announced Tuesday on the Senate floor by Senator Majority Leader Harry Reid. Dole, 89, self-admitted for a procedure, a spokesman for Walter Reed told ABC News. Dole is expected to be discharged today.

NAKED PROTESTORS OCCUPY JOHN BOEHNER'S HOUSE OFFICE. ABC's Z. Byron Wolf reports,some protesters dropped trou to launch a protest at House Speaker John Boehner's office in the Longworth House Office building in Washington. U.S. Capitol Police public information officer Shennell Antrobus confirmed: "three females arrested for lewd and indecent acts in the Speaker's Longworth office. Demonstrators disbursed that area." This is an office across the street from the Capitol Building. The speaker, who has a plush suite of offices in the Capitol Building, never works in the district office, so he wasn't privy, as it were, to the privates.

PETRAEUS SCANDAL: SOCIALITE JILL KELLEY FIGHTING BACK. ABC's Pierre Thomas and Jack Cloherty report, Tampa socialite Jill Kelley is fighting back. On Tuesday, sources close to the woman who was caught in the media crossfire during the David Petraeus sex scandal have released new letters aimed at reclaiming her reputation. In one, Kelley's attorney goes after a New York businessman who claimed Kelley was using her connections to Petraeus to broker a deal with the South Korean government.

WASHINGTON HOTEL PREPARES FOR INAUGURATION WITH 'TWEETBAR,' OBAMA-THEMED AMENITIES. Looking for the perfect present for a presidential history buff this holiday season? ABC's Sarah Parnass reports, the Ritz-Carlton in Washington's Dupont Circle has just the thing - but it will cost you a pretty penny. With packages starting at $1,095 per night, guests staying over inauguration weekend can enjoy a four-night program featuring the extravagant tastes of presidents past and present. Each night has new activities and amenities.


-HAPPENING TODAY: MOVE ON GETS MOVING ON FISCAL TALKS. From a adviser: "MoveOn members will take the fiscal fight local with visits planned to state and district offices of every senator and representative in all 50 states. Each participating MoveOn member will stop by a senator or representative's office to deliver a letter calling on that senator or representative to stand up for the middle class instead of millionaires. As Republicans continue to try to ram through another extension of the Bush tax cuts for the rich and some Democrats waver in the face of conservative intransigence, the message from MoveOn members to their representatives is to defend the middle class by asking the wealthy to pay their fair share and by preventing any cuts to Social Security, Medicare, or Medicaid benefits. The letter contains the following demands: (1) Let the Bush Tax Cuts for the top 2% expire, as scheduled, on December 31. (2) Ensure that there be no cuts whatsoever to Social Security, Medicare, or Medicaid benefits. The in-person letter drop will coincide with AFL-CIO's members' visits to congressional offices in Washington, DC to make these same demands."


@politicalwire: Feds believe Jesse Jackson Jr. was tipped off on investigation into his personal finances before he took medical leave

@sahilkapur: Erskine Bowles tells me Tom Cole's call for GOP to take Obama's tax offer is "a step forward" and he'll tell GOP leaders that later today.

@markknoller: Pres Obama delivers his latest tax cut pitch at 1135AM to invited middle class Americans whose taxes would rise if his plan not enacted.

@mattklewis: As an aside, Bill Bolling's exodus doesn't make Bob McDonnell or MItt Romney look especially influential in the Commonwealth.

@BretBaier: As fiscal cliff debate continues - the golf world makes a decision on belly putters! …

@Cibski: MT @RobinRoberts Have my dancing slippers on watching @GMA & #DWTSAllStars. Congrats to Melissa/Tony & all great finalists…XO