Deal Emerging on Avoiding Fiscal Cliff

Despite the bluster from both sides, Politico says the contours of a tax and spending deal are starting to take shape.

“Cut through the fog, and here’s what to expect: Taxes will go up just shy of $1.2 trillion — the middle ground of what President Barack Obama wants and what Republicans say they could stomach. Entitlement programs, mainly Medicare, will be cut by no less than $400 billion – and perhaps a lot more, to get Republicans to swallow those tax hikes. There will be at least $1.2 trillion in spending cuts and ‘war savings.’ And any final deal will come not by a group effort but in a private deal between two men: Obama and House Speaker John Boehner (R-OH). The two men had what one insider described as a short, curt conversation Wednesday night — but the private lines of communications remain very much open.”

However Reuters reports Treasury Secretary Timothy Geithner will meet with Congressional leaders today “amid signs that the market-rattling uncertainty about the outcome could go down to the wire.”