Politico: ‘Major Progress’ Overnight on Fiscal Cliff Talks December 31, 2012

Politico:
Senate Minority Leader Mitch McConnell (R-Ky.) and Vice President Joe Biden engaged in furious overnight negotiations to avert the fiscal cliff and made major progress toward a year-end tax deal, giving sudden hope to high-stakes talks that had been on the brink of collapse, according to sources familiar with the discussion.
McConnell and Biden, who served in the Senate together for 23 years, only started talking Sunday, after negotiations between Senate Majority Leader Harry Reid (D-Nev.) and McConnell sputtered.
Sources close to the talks said a deal is now more likely to come together but cautioned that obstacles remain, including how Speaker John Boehner and House Republican leaders react to any tentative agreement.
“The Leader and the VP continued their discussion late into the evening and will continue to work toward a solution. More info as it becomes available,” a McConnell spokesman said.
It comes as Washington awakens on a chilly New Year’s eve to a daunting reality: If lawmakers and the White House are not able to broker a last-minute deal on the fiscal cliff, the country will actually go over it.
Going over the cliff is not how Americans want to start 2013: with hefty new tax hikes and spending cuts that could send the stock market plummeting, slash defense spending and interrupt an economic recovery that was just beginning to spark.
But after a weekend in which senators haggled over one obstacle to agreement after another, going over the cliff looked like real possibility, if not a probability. The McConnell-Biden talks look like they could avert this potential disaster.
If there’s an agreement, it will come out of the Senate. Speaker John Boehner has said the House will take up whatever bill the Senate passes and either pass it, or amend it and send it back to the upper chamber.
The main hurdle remained over which income groups would be hit with tax hikes in the new year.
Democrats had proposed raising taxes on individuals who make more than $360,000 annually and families whose income is more than $450,000. And McConnell had countered with a tax hike for individuals above $450,000 and couples who earn more than $550,000 earlier in the evening Sunday.
But Democratic sources close to the talks said McConnell would have to go significantly lower to win support from their party, although that would make it more difficult for the GOP leader to win over fellow Republicans. Estate taxes, a chief concern for McConnell, remained a sticking point as well.
Read more: http://www.politico.com/story/2012/12/fiscal-cliff-hanger-as-deal-in-limbo-85599.html#ixzz2GdSBWv4E