The 4 Fiscal Cliff Deals That Are Still Possible
With less than a week to go before going over the fiscal cliff becomes the reality that common wisdom said absolutely could not happen, there are only a handful of ways this is going to go down.
1. The Big Deal. This isn't going to happen. Never mind that the political support doesn't exist to do the combined comprehensive tax and Medicaid/ Medicare/Social Security reform that is the basic definition of a big budget deal. Even if that political support did exist there simply isn't enough time left to get it done before January 1 and 2. I'm mentioning it here just to dismiss the notion out-of-hand before someone asks about it. Chance of happening: 0%.
2. The Kick-the-Can-Down-the-Road. Yes, I know how sickeningly commonplace this continually repeated phrase has become, but it is still a fiscal cliff possibility. In fact, the procedurally (but not the politically) easiest thing to do at this point would be to extend all the existing tax cuts until, say, six months or a year from now, and delay the spending cuts to the same date, that is (no screaming, please), to kick the can down the road. This might even be doable with a voice vote in both houses. Chance of happening. Chance of happening: 5%.
3. The Fig Leaf. This has become the increasingly discussed option last Friday: Do something small that's just enough to provide political cover to everyone for cancelling the tax increases and spending cuts. For example, an agreement to do nothing more than extend the tax cut for those earning $250,000 or less each year and perhaps something else (the White House is pushing for an extension of unemployment benefits, for example) might be enough to make cancelling the rest of the fiscal cliff politically acceptable. This could be done relatively quickly because the legislation would only deal with a limited number of issues. Chance of happening: 10%.
4. Nothing. Even though it will be one of the worst possible outcomes economically, It's hard to argue with the procedural simplicity of doing nothing because nothing would have to be debated, passed in the House and Senate, compromised or signed by the president. No votes, caucus meetings, press conferences or negotiating sessions. Chance of happening: 85%.