Time's Up: Sides Closing In on 'Fiscal Cliff' Deal

President Obama said an 11th-hour agreement to avert year-end tax hikes on 98 percent of Americans is "within sight" but not yet complete with just hours to go before the nation reaches the so-called fiscal cliff.

"There are still issues left to resolve but we're hopeful Congress can get it done," Obama said at a midday White House news conference. "But it's not done."

Congressional and White House negotiators have forged the contours of an agreement that would extend current tax rates for households making $450,000 or less; raise the estate tax from 35 to 40 percent for estates larger than $5 million; and prevent the Alternative Minimum Tax from hammering millions of middle-class workers, sources said.

The deal would also extend for one year unemployment insurance benefits set to expire Tuesday, and avert a steep cut to Medicare payments for doctors.

"There is an agreement to fix the tax problem; that is finalized," an aide to Senate Minority Leader Mitch McConnell told ABC News.

Both sides remained at odds over what to do about the other significant piece of the "fiscal cliff" -- the more than $1 trillion of automatic cuts to defense and domestic programs set to begin tomorrow.

The White House has proposed a three-month delay of the cuts to allow more time to hash out details for deficit reduction, while many Senate Democrats want a flat one-year delay. Republicans insist that some spending cuts should be implemented now as part of any deal.

Chip Somodevilla/Getty Images

'Fiscal Cliff': Lawmakers Scramble for Last-Minute Deal Watch Video

"In order to get the sequester moved, you're going to have to have real, concrete spending cuts," Rep. Mike Rogers, R-Mich., said. "[Without that], I don't know how it passes the House."

Vice President Joe Biden and McConnell, R-Ky., have been locked in behind-the-scenes negotiations for much of the day, sources said, following several "good" conversations that stretched late into Sunday night.

"We are very, very close," McConnell said in an afternoon speech on the Senate floor. "We can do this. We must do this."

If a deal is reached between Biden and McConnell, members in both chambers would still need to review it and vote on it later today. Passage is far from guaranteed.

"This is one Democrat that doesn't agree with that at all," Iowa Democratic Sen. Tom Harkin said of the tentative deal. "No deal is better than a bad deal, and this looks like a very bad deal the way this is shaping up."

"I don't see how you get something voted on today," Rogers said. "Even if they get a handshake deal today, you have to put the whole thing together and that's probably not going to happen before midnight. So it would make sense to roll into tomorrow to do that."

Failure of Congress to act on a tax measure by Tuesday morning would trigger income tax hikes on all Americans. The average family would pay an extra $3,446 in 2013 under the higher rates, according to the Tax Policy Center.

Regardless of the "cliff," virtually all workers are due to see less in their paychecks starting in January when the temporary 2 percent payroll tax cut will expire.

More than $1 trillion in automatic spending cuts to defense and domestic programs will also begin to take effect later this week unless Congress delays or replaces them.

"It is absolutely inexcusable that all of us find ourselves in this place at this time," Sen. Joe Manchin, D-W.Va., said Sunday night on the Senate floor.

"Something has gone terribly wrong when the biggest threat to our American economy is our American Congress," he said, echoing a frustration shared by many Americans.

Both sides say the cost of failure is high.

"If we are not able to reach an agreement, it will be dire," Sen. Jon Kyl, R-Ariz., said Sunday on ABC's "This Week." "Probably at least another million jobs lost, an unemployment rate over 9 percent, and putting us back into recession."

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2012 review: The year in health science

Read more: "2013 Smart Guide: 10 ideas that will shape the year"

The first half of 2012 will be remembered for the saga over whether or not to publish controversial research involving versions of the H5N1 bird flu virus engineered to spread more easily in mammals. In the end openness won out, and both contentious studies did finally see the light of day.

This was also the year that saw the battle to eradicate polio reach its crucial endgame – just as another problem, in the form of totally drug resistant tuberculosis, reared its head.

Away from infectious disease, 2012 brought us a theory on the link between Tutankhamun, epilepsy and the first monotheistic religion, and an insight into the perils of premature ageing in Italy's ominously named Triangle of Death. Here are 10 more of the year's memorable stories.

Babies are born dirty, with a gutful of bacteria
Far from being sterile, babies come complete with an army of bacteria. The finding could have implications for gut disorders and our health in general

Forensic failure: 'Miscarriages of justice will occur'
Our survey of UK forensic scientists reveals that many are concerned that closure of the Forensic Science Service will lead to miscarriages of justice

Scandal of an underfunded and undertreated cancer
Lung cancer in those who have never smoked is on the rise – but they face the same stigma as their smoking counterparts

Ovarian stem cells discovered in humans
Stem cells capable of forming new eggs could promise limitless eggs for IVF treatments, and the rejuvenation of older eggs

Paralysis breakthrough: spinal cord damage repaired
An implant helping paralysed people stand unaided suggests the spinal cord is able to recover function years after severe damage

A real fMRI high: My ecstasy brain scan
Graham Lawton reports the highs, lows and psychedelic purple doors involved in taking MDMA while having his brain scanned

You may carry cells from siblings, aunts and uncles
Male cells found in the umbilical cord blood of baby girls with older brothers suggests fetal cells cross between mother and baby more than once thought

Can we deter athletes who self-harm to win?
The Paralympics may encourage a debate on a dangerous practice – and potential ways to prevent it

First non-hormonal male 'pill' prevents pregnancy
A non-hormonal drug that temporarily reverses male fertility appears to have few side effects in mice

Mining MRSA genetic code halts superbug outbreak
Whole genome sequencing of an MRSA outbreak has identified the person who unwittingly spread the bacteria around a hospital, stopping further infection

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C. Africa's pressured leader open to unity government

BANGUI: The president of the Central African Republic was on Sunday said to be ready to make important concessions to a rebel coalition that has easily pushed its way across the impoverished country and was within striking distance of the capital Bangui.

After meeting with President Francois Bozize, African Union chief Thomas Boni Yayi said Bozize was ready to take part in talks to end the crisis, and that he would not run for president in 2016.

The talks "should lead to a national unity government", Boni Yayi said, adding that Bozize, who seized power in a 2003 coup and then won two elections, would not run for re-election in 2016 and would "respect constitutional provisions".

Opposition figures have criticised the president, whom they suspect wants to modify the constitution to enable a third term in office.

Rebels from a coalition known as Seleka, who took up arms December 10 near the Chad border and have met little resistance from government troops, on Sunday warned they could enter Bangui.

The rebels, now controlling five regional capitals in the centre and north of the country, faced no opposition as they entered the town of Sibut around 150 kilometres from Bangui on Saturday, a military official told AFP.

The country's armed forces had retreated to Damara, the last major town on the way to the capital, about 75 kilometres to the southwest.

Rebel spokesman Eric Massi on Sunday had said rebels would enter Bangui "if the situation demands it" but later said he had "taken note" of Bozize's pledges.

"A meeting shall be held with (Boni Yayi) to study in detail President Bozize's proposals and together create a plan to end the crisis," he told French radio.

With the rebels closing in, the Economic Community of Central African States (ECCAS), which has troops in the country, warned both sides Sunday that Damara must remain in government control.

"The ECCAS forces are on maximum alert, and the city of Damara is the line not to be crossed. We ask the FACA (government forces) and the rebels not to advance from their current positions and to give talks a chance," said Antonio Di Garcia, head of the regional bloc's mission, on national radio.

The rebels have been insisting on Bozize's departure.

"That issue must be discussed with the African Union," Massi told AFP. "President Bozize must recognise his military defeat on the ground ... and draw the necessary conclusions".

Officials on both sides said the rebels had also repelled army soldiers trying to recapture Bambari, a former military stronghold in the landlocked country, one of the world's poorest despite vast mineral wealth.

The coalition of three rebel movements in Seleka -- or the "alliance" in the Sango language -- launched their offensive claiming the government failed to meet the terms of peace pacts signed in 2007 and 2011, which include providing for disarmament, pay and social reintegration for insurgents.

Bozize on Sunday asked for a meeting with French President Francois Hollande, but calls for help from former colonial power France, as well as from the United States, have so far not been heeded.

France has a military presence of about 580 troops in the country, 180 of whom arrived overnight Saturday, the French defence ministry said.

This contingent is on hand to help protect and evacuate French and European nationals, should the need arise.

Hollande late Sunday urged all sides involved in the conflict to end hostilities, and welcomed efforts to find a negotiated solution to the crisis.

Neighbouring Chad, which helped Bozize with rebellions in 2010, has sent a contingent to the country, but those troops too have retreated from the rebel advance.

In Bangui, the population was fearful of a rebel attack and the uncertainty has caused a sharp spike in food prices. Authorities have imposed a night-time curfew, resulting in an eerie quiet in the usually noisy city.

In the town centre, businesses had hired guards armed with machetes to stand watch and prevent looting.

"I'm afraid of the rebels coming," said vegetable vendor Euphrasie Ngotanga in the city's huge Sambo market. "We're not going to sell our produce if there's no peace. And then how we will feed our children?"

The landlocked Central African Republic, with a population of about five million, is notorious for unrest including coups, army mutinies and rebellions.

- AFP/jc

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Decluttering before the New Year

Time off work during the holidays is a perfect time to tidy up your home and work spaces to start the New Year right.

STORY HIGHLIGHTS

• Do your New Year's resolutions include a push to clean up? Here are some tips to start


• Being organized is about being in control, says professional organizer Susan Fleischman


• Cleaning clutter can eliminate the need to buy what you simply can't find

(CNN) -- Whatever other resolutions we make leading up to the New Year -- to call Mom more often, lay off the late-night snacks -- getting ourselves organized is likely near the top of the list. And that often means clearing out the clutter that keeps us from functioning efficiently, whether we're at work or at home.

Many employees -- whether they go to actual offices or do their jobs from home -- find the last week of the calendar year is ideal for sorting through e-mails, clearing their desks, and reorganizing their work spaces. Sorting through stuff is rarely fun, but those who tackle it now will find themselves a step ahead when their now-vacationing colleagues and clients come staggering back after the holidays.

According to the National Association of Professional Organizers, which sponsors the annual "Get Organized Month" each January to help folks take control of their time, tasks and possessions, 83% of members polled say that "paper organization" ranks highest on their individual and corporate clients' to-do lists. For people taking time off between Christmas and New Year's, this week offers a chance to get things in order before 2013 arrives.

Devoting time to both physically and mentally clearing out the "old" and embracing the "new" is about more than just getting rid of stuff. Being organized is really about being in control, says Susan Fleischman, a Chicago-based professional organizer, home stager and founder of clutterfree.

"As joyous as the holidays can be, the period between Thanksgiving and New Year's is probably one of the most stressful of the year for people," she says. That's why spending the week after Christmas decluttering "really helps you recover and detox from the hustle and bustle of the holidays.

"It's very symbolic -- we're ramping up to the ultimate do-over. We all get to turn the calendar page and make a fresh start."

For those at work, says Fleischman, "the phone stops ringing, there are fewer meetings. Real work probably comes to a screeching halt. There are far fewer reasons to keep letting getting organized fall to the bottom of the to-do list." And these days, when employees often feel compelled to work harder and longer, being organized can be a real competitive advantage.

NAPO Industry Member Director Mary Dykstra says that on average, Americans waste time amounting to between six and 12 weeks a year searching for things in their offices and homes. "Just imagine if you could get out from under that clutter and spend that time helping your company build their business and ultimately, your career," says Fleischman, who was a public relations and marketing executive before launching her professional organizing business.

"Every minute counts when it comes to impressing the boss, your colleagues and clients. At work, we strive to project that we're knowledgeable, in control and experts. We're constantly accessing, sharing, reacting to information. Being able to put your hands on the information or generate some information means the better you'll be able to rise to the top and have clarity of thought and creativity and maximize productivity."

But what about moving from work to the home front? Cynthia Ewer, the Washington state-based editor of OrganizedHome.com and the author of "The Complete Idiot's Guide to Getting Organized Fast-Track," suggests we use this in-between-holidays week to step back and reflect on our habits and how well they're working for us at home.

It's important to remember, says Ewer, that "there are different personality types. "Organized" is what works for you. There are filers -- people who love folders. They want the serenity of knowing where things are. Pilers like to keep their eyes on their stuff. Deniers have bags of paperwork shoved into closets. Instead of using a "What-does-it-look-like?" yardstick, it's a "How-will-it-work?" question. Know yourself, and come up with solutions that reflect who you are, she says.

After all, she says, " 'It's here somewhere' is the most frustrating phrase in the English language."

Cutting clutter also can boost the bottom line. "How many times do you go to the store and buy the things you couldn't find?" asks Fleischman. But cleaning up and cleaning out also can generate money, says Ewer.

"It can be a real fun process to turn your clutter into cash."

Nab tax deductions by donating cleared-out items to nonprofit organizations. Declutterers can send usable books, DVDs, video games and music to third-party merchants in exchange for gift cards through the Amazon Trade-In Program. Even computer manufacturers like Apple offer gift cards to customers who send in an old iPhone, iPad or computer for reuse or recycling, if those devices still have monetary value.

"Leading an orderly life is about saving time, saving money, reducing stress," says Fleischman, who also blogs about organizing tips and clutter makeovers. "And that's energy you can spend on leisure pursuits, which is very important to emotional well-being."

Some tips for cutting through the workplace and home clutter this holiday week:

• Stockpile your supplies. Fleischman advises making sure you've got the right trash bins, shredders, file folders and markers at your fingertips before you start sorting and tossing.
• Take it a zone at a time. Your office, home and car didn't become a mess overnight, so declutter in increments. Fleischman suggests starting with desktops, then floors, then moving on to file cabinets and bookcases.
• Go from horizontal to vertical piles. If you're purging papers, clear those piles from your desk and the floor by placing newly sorted files in a cabinet or an upright vertical file. This way, your eyes can quickly scan and identify what you need at a glance.
• Free up the fridge. "Get the ghosts of Christmas past out of there -- all those little cans of this and that, the beef sticks from the gift basket no one can bear to throw out," says Ewer. Besides, this clean-up also will save you some calories.
• Be realistic. If you really write out bills at the kitchen table and not in the home office, says Ewer, get yourself a wheeled cart you can roll where the work gets done. If your kids' toys actually live in the family room -- not in the bedroom toy box -- create a storage solution there.

"Look at your patterns of living and organize yourself accordingly."

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Pakistan terror incidents threaten peace talks

ISLAMABAD The killing of 41 people in two separate terrorist incidents in Pakistan appeared on Sunday to temporarily halt prospects for immediate peace talks between Pakistani authorities and Taliban militants, two senior Pakistani intelligence officers and a senior western diplomat in Islamabad warned.

Both intelligence officers said that the fallout of the killings may even harm U.S. plans to peacefully draw down troops from Afghanistan, with Pakistan's active backing.

In the first incident, 21 Pakistani paramilitary guards working in the northern Khyber-Pakhtunkhwa province who were kidnapped last week by the Taliban were confirmed dead on Saturday.

"All the 21 young men were brutally killed by their captors," said one Pakistani intelligence officer who spoke to CBS News on condition of anonymity because intelligence officers are not allowed to speak to journalists.

He said that the kidnapped men's killings may have been triggered in part by the Pakistani government's refusal to release some Taliban militants in custody.

After the men were kidnapped, a senior government official in the northern city of Peshawar, the provincial capital, told CBS News that the Taliban were demanding the release of some of their fellow militants in Pakistan's custody in exchange for the 21 men.

In the second incident on Sunday, at least 20 Pakistanis of the Shia Muslim faith were killed and more than 20 wounded when a car bomb targeted their convoy of buses being driven through the southwestern Baluchistan province to the Iranian border.

Pakistani officials said the dead were heading to Iran's northern holy city of Mashhad to attend an important Shiite commemoration in the coming week.

The second Pakistani intelligence officer who spoke to CBS News said that the killings in Baluchistan "seem to be linked to factions associated with the Taliban.

"These killings make it practically impossible for the government to have a peace dialogue with the Taliban," the officer said. "No one will speak to these people while we have a gun pointed to our heads."

In the past, representatives of Pakistan's Shia Muslims have claimed that the Taliban (who belong to a hardline version of the Sunni Muslim faith) have been involved in attacks on Shiites in Baluchistan.

The two terrorist incidents were preceded by reports of the Taliban sending messages to senior leaders of President Asif Ali Zardari's administration in Islamabad, seeking peace talks to end a decade-long conflict with the Pakistan army.

Senior government officials have reacted cautiously, with some suggesting that the offer should be carefully considered, while others have warned that the Taliban will not agree to end their attacks on Pakistani troops until a final settlement, on their terms, comes together.

"The two brutal terrorist incidents are a major cause of concern. They suggest there's no appetite among the Taliban for a peaceful end to the war," said a senior Western diplomat in Islamabad who also spoke to CBS News on condition of anonymity.

He warned that in addition to Pakistan's own internal security conditions, more violence will make it harder for the country to cooperate with the U.S. in facilitating an orderly American troop drawdown from Afghanistan by end of 2014.

"Pakistan will be the main route for U.S. troops leaving Afghanistan. If there is no end to Taliban violence in Pakistan, the drawdown will face threats," added the diplomat.

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President Suggests Small 'Cliff' Deal Likely

With less than two days remaining for Congress to reach a budget agreement that would avoid the so-called “fiscal cliff,” President Obama today suggested that a small deal remains the best hope to avoid the perilous package of spending cuts and tax increases.

In an interview aired this morning on NBC’s “Meet the Press” the president said if Republicans agreed to raising taxes on top income earners it should be enough to avoid the triggers that would execute the $607 billion measure. Economists agree that going over the cliff would likely put the country back in recession.

“If we have raised some revenue by the wealthy paying a little bit more, that would be sufficient to turn off what’s called the sequester, these automatic spending cuts, and that also would have a better outcome for our economy long-term,” he said.

Saying the “pressure is on Congress to produce,” the president did not specify what income level his party would deem acceptable as the cutoff for those who would see their tax rates remain at current levels. The president has called for expiration of the “Bush-era” tax cuts to affect household earnings over $250,000 since the campaign, but has reportedly floated a $400,000 figure in past negotiations. Speaker John Boehner once offered a $1 million cut-off in his failed “Plan B” proposal, which failed to garner enough support among the House Republicans.

“It’s been very hard for Speaker Boehner and Republican Leader McConnell  to accept the fact that taxes on the wealthiest Americans should go up a little bit as part of an overall deficit reduction package,” the president said.

Domestic programs would lose $55 billion in funding should sequestration pass, including $2 billion to Medicare and unemployment benefits. The Pentagon would take a $55 billion loss as well, or 9 percent of their budget.

Repeating remarks he made Friday after a meeting with congressional leaders, Obama said that should negotiations fail he has asked Senate Majority Leader Harry Reid, D-Nev., to introduce a stripped- down proposal to Congress for a straight up-or-down vote – if it isn’t blocked.

“If all else fails, if Republicans do in fact decide to block so that taxes on the middle class do in fact go up on January 1, then we’ll come back with a new Congress on January 4, and the first bill that will be introduced on the floor will be to cut taxes on middle-class families,” he said of the worst case scenario. “I don’t think the average person is going to say, ‘Gosh, you know, that’s a really partisan agenda.’”

The interview was taped Saturday while Reid and his GOP counterpart Sen. Mitch McConnell of Kentucky scrambled to their offices for a solution behind closed doors. Press staking out Capitol Hill reported little public activity from the leaders or their surrogates. If negotiations are successful, the lawmakers could introduce a bill for vote this afternoon.

Republican leaders bit back at the president’s remarks. In a written statement Speaker Boehner said casting blame was “ironic, as a recurring theme of our negotiations was his unwillingness to agree to anything that would require him to stand up to his own party. ”

“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.”

Senator 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. Currently standing at 35 percent, Republicans want to leave that rate 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.

ABC’s Sunlen Miller and the Associated Press contributed to this report, which has been updated.

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Today on New Scientist: 28 December 2012

Best videos of 2012: Rare view of Challenger tragedy

Watch a rare amateur video of the Challenger explosion, our most-viewed video of the year

Strong jet stream super-charged US Christmas storms

Record snowfall and dozens of tornadoes snarled holiday travel as a powerful winter storm plowed across much of the US, while rainstorms battered the UK

2012 review: The year in life science

The year's biggest stories in life science, including James Cameron's descent into the Mariana trench and efforts to break into Antarctica's buried lakes

Superstorm lessons for adapting to climate change

As the post-Sandy rebuild gets under way, coastal cities around the world will be watching

Best videos of 2012: First MRI movie of childbirth

Watch a unique view of a baby's birth, at number 2 in our countdown of the year's top science videos

Fleadom or death: Reviving the glorious flea circus

The parasite-based sideshows were almost done for by the domestic vacuum cleaner - but they are bouncing back, finds Graham Lawton

Approval for gene-modified salmon spawns controversy

Apparently months late, US regulators have declared genetically engineered fish safe to farm and eat, but final approval could be some way off

Best videos of 2012: New aircraft flies inside out

Watch a novel flying machine use a unique mechanism to propel itself, at number 3 in our countdown of the top videos of the year

2012 review: The year in technology

The year's biggest stories in technology, including Kinect devices that may spot signs of autism and controlling a robot by the power of thought

Superdoodles: The science of scribbling

Far from being a distraction, doodling has an important purpose - and you can harness it

2013 Smart Guide: Wave goodbye to the mouse

The Leap, a 3D motion control device set to launch next year, will let you control your computer with touch-free hand and finger movements

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China sets date for 12th National People's Congress

BEIJING: China has fixed March 5, 2013, as the date it will convene a key legislative session, state media reported Friday, with new Communist Party chief Xi Jingping set to become president during the two-week meeting.

The date for the start of the first annual session of the 12th National People's Congress (NPC) was approved at an NPC Standing Committee meeting Friday, the official Xinhua news agency reported.

The announcement comes after the Communist Party in November chose current Vice President Xi to take over the reins of the ruling party from current President Hu Jintao.

That was the first step in China's highly choreographed once-a-decade leadership transition that sees the party change leaders first, with state positions, including president, premier and other key posts, filled at the NPC several months later.

Xi is set to be formally selected as president during the NPC session, while Li Keqiang, another top party official, is slated to become premier, replacing Wen Jiabao, the positions's current occupant.

Xinhua said the legislative session would last about two weeks and would also deal with other important matters including approving a draft plan on national economic and social development for next year.

The announcement of the start of the next NPC comes after November's party congress, which had been expected some time in October, was delayed amid an internal party scandal involving disgraced politician Bo Xilai.

Bo, the former party boss in the central mega-city of Chongqing, was once seen as a candidate for promotion to the party's top echelons but was brought down by murder allegations against his wife that came to light after his police chief sought refuge in a US consulate.

Gu Kailai, Bo's wife, was later given a suspended death sentence -- a judgment commonly commuted to a life sentence -- for fatally poisoning British businessman Neil Heywood.

Bo has been formally expelled from the party and is in custody awaiting trial for alleged corruption and abuse of power.

The months-long controversy exposed deep divisions in the party's top leadership ahead of the sensitive power transition, as Bo had influential patrons and a following among left-leaning members.

-AFP/ac

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Obama, congressional leaders to meet on fiscal cliff

STORY HIGHLIGHTS

• NEW: GOP Sen. Alexander says a deal will be reached, either now or soon


• President Obama calls congressional leaders to the White House


• Democrats, Republicans trade blame over who is preventing an agreement


• Without an agreement, everyone's taxes go up next week

As the fiscal cliff looms, what's your New Year's message to Washington? Go to CNNiReport to share your video.

Washington (CNN) -- Is it political theater or a true last-ditch effort to avoid the fiscal cliff?

President Barack Obama and congressional leaders will discuss the looming combination of tax hikes and spending cuts at a White House meeting on Friday, as increasingly anxious markets and taxpayers look for any hint of progress.

Diminished hopes for a substantial agreement in Washington again depressed stock indexes on Wall Street despite other encouraging news on the economy. Consumer confidence has also softened due to political inaction.

Economists warn that continued stalemate could trigger recession as taxes go up on everyone with the expiration of lower rates from the administration of President George W. Bush, coupled with slashed government spending, including for the military.

The White House meeting scheduled for 3 p.m. ET will include Obama, Vice President Joe Biden, House Speaker John Boehner, House Minority Leader Nancy Pelosi, Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell.

It comes with the Senate back in town after a Christmas holiday for a rare end-of-year appearance before a new Congress convenes early in the new year. Boehner plans to bring the House back on Sunday.

Reid and McConnell took turns blaming the other side for the impasse on Thursday, but neither seized the chance to offer remarks when the Senate opened on Friday. Other senators expressed opinions on the negotiations ranging from optimism to frustration.

"When the dust settles and everything is said and done, federal individual income taxes are not going to go up on almost all Americans next year," GOP Sen. Lamar Alexander of Tennessee told reporters.

Democratic Sen. Chuck Schumer of New York told NBC's "Today" show he was "a little more optimistic today" about reaching a deal.

"Sometimes it's darkest before the dawn," Schumer said, noting the renewed engagement by McConnell and Boehner, the top congressional Republicans.

"The fact that (Boehner's) come back and the four of them are at the table means to me we could come up with some kind of agreement that would avoid the main parts of the fiscal cliff, particularly taxes going up on middle-class people," he added.

Sen. Olympia Snowe, R-Maine, told CNN's "Starting Point" that a deal must originate from talks between Obama and the four congressional leaders for Americans to regain confidence in the federal government.

"It's got to start with the leaders and the president at the White House this afternoon. Hopefully they'll agree to a framework," said Snowe, who is retiring.

"I hope the speaker can get this job done before the end of this year and not defer it to next year," she continued. "We've got to demonstrate we have some capacity left to make decisions in Washington on these very significant issues for the country."

However, Republican Sen. Bob Corker of Tennessee downplayed the importance of Friday's meeting on CBS "This Morning," saying it "feels too much to me like optics to make it look like we're doing something."

"This is a total dereliction of duty at every level," added Corker, who has called for Republicans to compromise on the central issue of allowing tax rates to increase on top income brackets. "I've been very surprised that the president has not laid out a very specific plan to deal with this, but candidly Congress could have done the same and I think the American people should be disgusted."

He predicted Friday's meeting would result in a "kick-the-can-down the road" solution, meaning larger questions on tax increases and spending cuts would be put off until next year.

On Thursday, McConnell said his side won't "write a blank check for anything Senate Democrats put forward just because we find ourselves at the edge of the cliff."

Reid, however, argued that Republicans undermined a potentially major agreement over the past two years by refusing to compromise on their opposition to higher tax rates for the wealthy. Hours before Friday's meeting was announced, he was doubtful there would be a deal by January 1.

"I don't know, timewise, how it can happen now," Reid said.

The principal dispute continues to be over taxes, specifically the demand by Obama and Democrats to extend most of the tax cuts passed under Bush while allowing higher rates of the 1990s to return on top income brackets.

Obama campaigned for re-election on keeping the current lower tax rates on family income up to $250,000, which he argues would protect 98% of Americans and 97% of small businesses from rates that increase on income above that level.

Republicans oppose any kind of increase in tax rates, and Boehner suffered the political indignity last week of offering a compromise -- a $1 million threshold for the higher rates to kick in -- that his GOP colleagues refused to support because it raised taxes and had no chance of passing the Senate.

Last Friday, the president proposed the scaled-back agreement that included his call for extending tax cuts on households with incomes under $250,000, as well as an extension of unemployment insurance.

Both sides say political concerns undermine a possible agreement.

On Thursday, Reid said Boehner wanted to wait until after the new House re-elects him as speaker early next month before proceeding with a compromise -- one that will need support from both Democrats and Republicans to pass.

Boehner is "more concerned about his speakership than putting the country on firm financial footing," Reid claimed.

In response, Boehner spokesman Michael Steel said Reid should stop talking and instead take up legislation passed by the House to avert the fiscal cliff.

Reid and Democrats reject the GOP proposals, which would extend all the Bush tax cuts and revamp the spending cuts of the fiscal cliff, calling them insufficient and saying they would shift too much deficit reduction burden on the middle class.

One possibility is the fiscal cliff takes effect and taxes go up in January, then Congress steps in to bring tax rates back down for at least some people -- allowing them to say they're lowering taxes, even if rates for top income brackets are higher in 2013 than they were in 2012.

Obama and Democrats have leverage, based on the president's re-election last month and Democratic gains in the House and Senate in the new Congress. In addition, polls consistently show majority support for Obama's position on taxes, and Democrats insist the House would pass the president's plan with Democrats joined by some Republicans if Boehner allowed a vote on it.

However, anti-tax crusader Grover Norquist has vowed to back primary challenges against Republicans who violate his widely signed pledge not to raise taxes. Even if a deal is reached, Norquist predicts budget showdowns will continue every time the government needs more money to operate.

"There the Republicans have a lot of clout because they can say we'll let you run the government for the next month, but you've got to make these reforms," he said this week.

On Wednesday, Treasury Secretary Timothy Geithner told Congress the government would reach its borrowing limit at year's end, but could take steps to create what he called "headroom" for two months or so.

However, Geithner said uncertainty about the fiscal cliff and deficit negotiations make it hard to predict precisely how long government measures to address the situation will last.

The possibility of a fiscal cliff was set in motion over the past two years as a way to force action on mounting government debt.

Now, legislators risk looking politically cynical by seeking to weaken the measures enacted to try to force them to confront tough questions regarding deficit reduction, such as changes to government programs like Social Security, Medicare and Medicaid.

The two sides seemingly had made progress early last week on forging a $2 trillion deficit reduction deal that included new revenue sought by Obama and spending cuts and entitlement changes desired by Boehner.

Obama's latest offer set $400,000 as the income threshold for a tax rate increase, up from his original plan of $250,000. It also had a new formula for the consumer price index -- called chained CPI -- that wraps in new assumptions on consumer habits in response to rising prices, such as seeking cheaper alternatives, and would result in smaller benefit increases.

Statistics supplied by opponents say the change would mean Social Security recipients would get $6,000 less in benefits over the first 15 years of chained CPI. Liberal groups have openly challenged the plan, calling it a betrayal of senior citizens who contributed all their lives for their benefits.

Boehner appeared to move on increased tax revenue, including higher rates on top income brackets and eliminating deductions and loopholes. But his inability to rally all House Republicans behind his plan last week raised questions about his role and what comes next.

What happens to the economy if we go over the cliff?

CNN's Dana Bash, Deirdre Walsh, Ted Barrett, Jessica Yellin and Kevin Liptak contributed to this report.

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East, Gulf Coast port strike averted, for now

Last Updated 12:15 p.m. ET

NEW YORK The union for longshoremen along the East Coast and Gulf of Mexico has agreed to extend its contract for 30 days, averting a possible strike that could have crippled operations at ports that handle about 40 percent of all U.S. container cargo, a federal mediator announced Friday.

The extension came after the union and an alliance of port operators and shipping lines resolved one of the stickier points in their months-long contract negotiations, involving royalty payments made to union members for each container they unload.

Negotiations will continue until at least midnight on Jan. 28. Some important contract issues remain to be resolved, but the head of the Federal Mediation and Conciliation Service, George Cohen, said the agreement on royalties was "a major positive step forward."

"While some significant issues remain in contention, I am cautiously optimistic that they can be resolved in the upcoming 30-day extension period," he said.

The terms of the royalty agreement were not announced.

• Unionized dock workers threaten to strike at 15 ports
• Tentative deal reached to end costly Calif. ports strike

The master contract between the International Longshoremen's Association and the U.S. Maritime Alliance, a group representing shipping lines, terminal operators and port associations, originally expired in September. The two sides agreed to extend it once before, for 90 days, but it had been set to expire again on 12:01 a.m. Sunday.

As recently as Dec. 19, the president of the longshoremen, Harold Daggett, had said a strike was expected.

A work stoppage would have idled shipments of a vast number of consumer products, from electronics to clothing, and kept U.S. manufacturers from getting pars and raw materials delivered easily.

Major ports that would have been frozen included the Port Authority of New York and New Jersey, Savannah, Ga., Houston and Hampton Roads, Va.

Other ports that would have been affected by a strike are Boston; Delaware River; Baltimore; Wilmington, N.C.; Charleston, S.C.; Jacksonville, Fla.; Port Everglades, Fla.; Miami; Tampa, Fla.; Mobile, Ala.; and New Orleans.

The ports handle nearly 50 percent of all ocean-going container shipments to the United States, reports correspondent Anna Werner.

Some estimate a shutdown could cost a billion dollars a day in delayed shipments and lost work along the supply chain.

The Port of Houston - which handles 42 million tons of cargo every year - extended its hours this week to try and get shipments in and out before a strike could bring the port to a standstill.

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