CNN's GUT CHECK | for December 31, 2012 | 5 p.m.
– n. a pause to assess the state, progress or condition of the political news cycle
BREAKING: SECRETARY CLINTON’S BLOOD CLOT BETWEEN BRAIN AND SKULL… Secretary of State Hillary Clinton has a blood clot between her brain and skull behind her right ear, her doctors said. Clinton remained hospitalized Monday in New York after the clot was discovered during a follow-up exam related to a concussion she suffered this month, her spokesman said. Her doctors said in a statement that the clot found Sunday "did not result in a stroke or neurological damage" and that they "are confident she will make a full recovery."
GOING OVER THE CLIFF – TECHNICALLY: The United States is headed over the fiscal cliff with no prospect of full congressional action before Tuesday. House GOP leaders have said the chamber would not vote on any cliff package until New Year's Day, after the midnight deadline for Bush-era tax cuts to expire. Republican leaders prefer to vote during the day, sources told CNN, instead of in the middle of the night. The steep budget cuts associated with the cliff are not set to take effect until Wednesday. – Dana Bash and Deirdre Walsh
POTENTIAL POLITICAL COVER: GOP sources admitted there is an added benefit to the delay: taxes would already be up, so lawmakers could argue that they are voting for tax cuts, as opposed to tax increases. One GOP source also said that may help get more House Republicans to vote for the deal. "I wouldn't overestimate it, but a handful may be the difference we need," the source said.
MEANWHILE, PRESIDENT SAYS DEAL WITHIN SIGHT: An agreement to avert the damaging impact of automatic tax increases and spending cuts appears to be “within sight,” President Barack Obama said Monday. “There are still issued left to resolve, but we are hopeful Congress can get it done,” Obama said. The deal that was taking shape included an agreement to raise the income tax rate on top earners to what it was during President Bill Clinton's last term in office, according to sources close to the process.
MCCONNELL ECHOES THE PRESIDENT: “I can report that we have reached an agreement on all of the tax – the tax issues. We are very very close. As the president just said.”
REAL FALLOUT: A Defense Department official tells CNN’s Chris Lawrence that the Pentagon is prepared to inform 800,000 civilian employees that they could face limited furlough in 2013, if there’s no deal to prevent the massive spending cuts from going into effect.
When was the last time Congress was in session on New Year Eve?
In the middle of the fever pitch of negotiations attempting to avert the fiscal cliff, the White House through the gauntlet down with a midday deadline: the president would brief the nation at 1:30 p.m. ET.
Newsrooms and war rooms went into hyper drive; Wolf Blitzer ran to position, consultants offered pre-buttals based on dueling outcomes and then sources started expressing hope that a partial deal would be announced.
As the minutes ticked down to – and then beyond – the scheduled start time, Republicans and Democrats talked about the fragile state of deliberations. Capitol Hill arm-twisting and note passing quickened; everyone uttered with sensitivity, “we are close.”
And then… smack in the middle of the hushed negotiations, the president bounced into the Old Executive Office Building buoyed by an audibly giddy contingent of “real people” who served as a live studio audience for his remarks, laughing at his jokes, smiling throughout his presentation.
It was as if the president had left a Christmas party to remind Congress that he didn’t need them. For those of us in Washington it seemed like a dance in the end zone before the touchdown pass had been completed. But it was also a reminder and perhaps a tip to how the president will play his hand in his second term, with a little more of his 2008 swagger, and a little less worrying about Washington.
Indeed, in a pre-election interview with CNN’s Jessica Yellin, Obama said a second term would be different, “My hope is that after this election, if I'm– elected to a second term, then the priority that some Republicans in Congress have placed on beating me will recede since I'll no longer be up for reelection,” Obama said in August. “Where I can work with them, I will. Where– they don't want to compromise, I'll work around 'em.”
Right now, America is with him - not just in the polls, but in attention span. “#KimK” was the top trending term on Twitter even in Washington, D.C., and talk radio was consumed with the NFL’s firings. The question is if the political move to ignore - and some would argue antagonize - a branch of government will come back to bite a president whose second term agenda (immigration, gun control) needs true bipartisanship.
Did you miss it?
Leading CNNPolitics: Economy hurt - and we're not over the cliff yet
The fiscal cliff hasn't been reached yet, but it has already affected the nation's economy. Economists say some key aspects of the economy have been weakened by worries about the fiscal cliff negotiations. But they say the damage is relatively small so far, with improvements in home sales, auto sales and job creation tempering the decline up to now. – Chris Isidore
Leading Drudge: Deal: No Cuts!
President Obama said Monday that an agreement to avoid the worst effects of the year-end fiscal cliff is “within sight,” but he stressed repeatedly that a deal being negotiated by Vice President Biden and Senate Minority Leader Mitch McConnell is “not done” yet, and he called on lawmakers to remain focused on the needs of the American people rather than politics. – Lori Montgomery and Paul Kane
Leading HuffPo: Fiscal Cliff Deal Growing More Likely, Would Raise $715 Billion In Revenue
The preliminary fiscal cliff deal being negotiated by Senate Minority Leader Mitch McConnell (R-Ky.) and Vice President Joe Biden would achieve up to $790 billion in revenue over the next decade. Some of that money would be offset by extensions of tax credits and other stimulative policy, leaving roughly $715 billion in debt reduction over that same time period. Because the revenue is counted over a decade, much depends on a variety of inexact assumptions, which is why the White House calculation of the total revenue raised by the deal is only $600 billion. – Sam Stein and Ryan Grim
Leading Politico: Crunch time: Senate lurches toward deal
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.
Leading The New York Times: Shape of Fiscal Deal Emerging, but Spending Still at Issue
Vice President Joseph R. Biden Jr. and Senator Mitch McConnell, the Republican leader, on Monday reached agreement on a tentative deal to stave off large tax increases starting on Tuesday, but remained stuck on whether and how to stop $110 billion in across-the-board spending cuts in 2013, an official familiar with the negotiations said. – Jonathan Weisman
The political bites of the day
– Republican senators slam presidential “pep rally” –
SEN. BOB CORKER OF TENNESSEE: “I just listened to the president and my heart’s still pounding. I was very disappointed to hear what the president just had to say in front of a pep rally. Something very unbecoming of where we are at this moment. … I know the president has fun heckling Congress. I think he lost probably numbers of votes with what he did.”
SEN. JOHN MCCAIN OF ARIZONA: “I am not sure yet as I sort out my impressions of the president’s remarks as to be angry or to be saddened. I’ve been around this town for a number of years and I, as is well known, had an interest in the presidency more than academic and I have watched a lot of presidents. … I must say, at a time of crisis, on New Years Eve, when at midnight at least certain actions take place or have to be planned to take place, we have the President of the United States go over and have a cheerleading, ridiculing of Republicans’ exercise.”
– Liberal senators may rebel –
DEMOCRATIC SEN. TOM HARKIN OF IOWA IN A SPEECH ON THE SENATE FLOOR: “If we are going to have some kind of a deal the deal must be one that really does favor the middle class, the real middle class, those making 30, 50, 60, 70 thousand dollars a year. That’s the real middle class in America. As I see this thing developing, quite frankly, as I have said before no deal is better than a bad deal and this looks like a very bad deal the way this is shaping up.” LINK
– All Dems want, says Rand Paul, is to stick it to ‘rich people’ –
REPUBLICAN SEN. RAND PAUL OF KENTUCKY IN A SPEECH ON THE SENATE FLOOR: “Mark my words. You will raise tax rates and you'll feel good because you went after and you got those rich people 'cause you said you were. You campaigned against rich people and you got enough envy whipped up in the country and you're gonna get 'em. You're gonna stick it to those rich people. But guess what? You may not get anymore revenue. You may not get anymore economic growth. But you can say, ‘I stuck it to the rich people.’”
– Even with fiscal cliff, Benghazi continues to loom large –
SEN. JOE LIEBERMAN, HOMELAND SECURITY COMMITTEE CHAIRMAN, AT A CAPITOL HILL PRESS CONFERENCE: “We’ve got a dangerous situation and inadequate security and yet the State Department failed to take adequate steps to fill those security gaps, failed to adequately support security requests from its own personnel in Benghazi and failed to make the one remaining decision that cries out to me as I look at the evidence here which was to simply say we have got to close this facility because we can’t protect American personnel in Benghazi.”
What stopped us in 140 characters or less
Nathan Gonzales (@nathanlgonzales)
Just to be clear, does West Coast go over the cliff at midnight Eastern or local time?
Jim Antle (@jimantle)
I hope as part of the deal we let Obama be clear. He's been asking for that for a long time.
Jill Lawrence (@JillDLawrence)
#Fiscalcliff melodrama cast list. Good cops: Biden, McConnell. Bad cops: Reid, Boehner. Unpredictable switch-hitter: Obama.
Strobe Talbott (@strobetalbott)
Revelation at cliffside: "Something is terribly wrong when biggest threat to our Am. economy is the Am. Congress," Sen. Joe Manchin of WVa
Arianna Huffington (@ariannahuff)
“I will buy a well-trained sheep dog to help me with my caucus.” – John Boehner #suggestedresolutions
Chad Pergram (@ChadPergram)
Senate Chaplain Black: Inspire them to choose what is right...rather than risk a national voyage bound in shallows & miseries. #fiscalcliff
The Fix (@TheFix)
Hillary Clinton is the most admired woman in the U.S., 17th time in 20 years. http://ow.ly/grY8f
People magazine (@peoplemag)
Kim Kardashian: Kanye and I are "so blessed" to be having a baby. http://ow.ly/grVuD
TRIVIA ANSWER from @DanMericaCNN
Is it rare that Congress is meeting on New Year Eve? Yes. But has it happened before? Yes.
The last time Congress was in session on New Years Eve was on December 31, 1995, when then-President Bill Clinton and House Republicans were negotiating to keep the government from shutting down. The impasse largely centered on Congress funding Medicare, education and environment programs in the 1996 federal budget. Non-essential government employees were furloughed for a total of 28 days during the negotiations in 1995 and 1996.
Congress got close to New Years Eve twice before. “They also were in session right up to the end of 1940 and 1941 because of the Second World War, although on neither of those occasions did they meet on December 31,” Don Ritchie, the Senate historian, told CNN.
After the Senate and the House were unable to reach a deal on the fiscal cliff yesterday, the Capitol is buzzing with activity on New Years Eve as both legislative bodies are in session. Among the sticking points: income tax rates, the estate tax and the capital gains tax rate.
Want proof that times haven’t changed? Take a look at CNN’s archives on the budget battle from 1995 and 1996.
A few selected headlines: “Senators offer bi-partisan budget plan,” “Defiant House torpedoes budget deal,” “Hopes for budget deal wither,” “Clinton calls for New Year's resolution to solve budget impasse,” and “Budget talks wait for New Year's break.”
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