Counting Down The Final Hours Of Fiscal Cliff Talks

Weekend Edition Sunday guest host Linda Wertheimer speaks with Joshua Green, senior national correspondent for Bloomberg Businessweek, about the latest in the last-minute push to resolve the debt crisis.

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LINDA WERTHEIMER, HOST:

This is WEEKEND EDITION from NPR News. Rachel Martin is away. I'm Linda Wertheimer. America has been talking - worrying - about it for months. Finally, the deadline for Congress to agree a deficit reduction plan is just hours away. This morning on NBC's "Meet the Press," President Obama warned of the consequences of failing to reach a deal, saying that markets would react negatively. He went on to fault Republicans for the stalemate.

(SOUNDBITE OF TV SHOW, "MEET THE PRESS")

PRESIDENT BARACK OBAMA: The offers that I've made to them have been so fair that a lot of Democrats get mad at me.

WERTHEIMER: Tonight, the House reconvenes to try once again to reach a deal to avoid automatic spending cuts and tax hikes. For analysis of what could happen in these final hours, I'm joined in the studio by Joshua Green. He is the senior national correspondent for Bloomberg Businessweek. Welcome, Josh.

JOSHUA GREEN: Good to be with you.

WERTHEIMER: Now, we're on the edge of the cliff - yet again. Do you see anything out there that looks like it might help to bring us back from the brink?

GREEN: Well, it's possible. I mean, beginning on Friday at this meeting at the White House between Obama and the leaders of Congress, there was a sort of a renewed level of optimism. After the failure of John Boehner's Plan B and sort of a few days of disarray where it looked like for certain we were going over the cliff, the debate now is whether the Democratic leader Harry Reid and the Republican leader, Mitch McConnell can arrive at some kind of a deal to stave off the income tax rates that are set to rise tomorrow - or on Tuesday, I suppose - for most Americans. And whether or not they can sort of fiddle with the inheritance tax is the other big thing at issue. If they can, there will be a vote this afternoon in the Senate, probably tomorrow in the House, to pass something just under the limit before we go over the cliff. But there's no guarantee that that's going to happen.

WERTHEIMER: Well, who among the main players do you think has the most interest in dealing at this point?

GREEN: I think that Republicans have the most interest in dealing because public polls show repeatedly that Republicans are the ones who are going to take the blame if we go over the fiscal cliff. And one reason why the failure of Plan B in the house - that was Boehner's bill to raise taxes on people who make a million dollars or more. One reason that was a big deal is that Republicans, if we go over, will be blamed for holding middle-class tax cuts hostage because - at a peak, basically - that rich people are going to have their taxes go up. And that's a tough position to be in if you're a Republican.

WERTHEIMER: So, there are those, aren't there, though, who think that going off the cliff's not so bad.

GREEN: There are actually people in both parties who think - they wouldn't say this openly - but who think privately that this is good for their party. A lot of Democrats think that because they know that Republicans stand to take the blame and a chastened Republican Party will be more likely to cut a deal favorable to Democrats. The other reason is that the new Congress, which gets sworn in next week, is going to have more Democrats in the House and the Senate. That obviously favors Democrats. For Republicans, the difficulty with voting for a deal to raise taxes today is that it would violate the central orthodoxy of the Republican Party over the last 20 years, which is you don't ever vote to raise taxes. But if you wait a couple days, then the fiscal cliff does the dirty work of resetting those tax rates higher. And then if you're a Republican, you can vote for a tax cut. And they're much more comfortable doing that.

WERTHEIMER: So, what can you see about a deal, if there is a deal?

GREEN: Well, any deal that happens, if it does, would deal mainly with income taxes, but that wouldn't deal with the spending side of the fiscal cliff, the budget sequester. The other thing we know is people's taxes would still go up because they're not talking about extending the payroll tax, which has been cut for the last two years. And the last thing is they deal doesn't look like it's going to deal with the debt limit, so we're guaranteed another big, scary fight two months from now.

WERTHEIMER: Josh Green is senior national correspondent for Bloomberg Businessweek. Thank you.

GREEN: Thank you.

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