No Deal: Fiscal Cliff Negotiations to Reconvene on New Year's Eve With 'Significant Distance' to Bridge

The Rotunda of the U.S. Capitol is seen as Congress convenes to negotiate a legislative path to avoid the so-called "fiscal cliff" of automatic tax increases and deep spending cuts that could kick in Jan. 1., in Washington, Sunday, Dec. 30, 2012. (Photo: AP)

Senate Majority Leader Harry Reid (D-Nev.) announced Sunday that any potential deal to avert the impending "fiscal cliff" would come with only hours to spare.

Combative as ever, Reid said he was pleased to hear that Republicans had withdrawn their suggestions for modifying Social Security benefits-- before saying the suggestion never should have been made.

Reid continued: "There's still significant distance between the two sides, but negotiations continue.  There's still time left to reach an agreement, and we intend to continue negotiations."

If the country heads over the "cliff" on January 1, a litany of taxes are set to increase and automatic budget cuts to the military will begin.  Republicans don't want to see tax hikes for any income group, while Democrats want to raise taxes on families making over $250,000 a year (or "millionaires and billionaires" as they are referred to in most speeches).

The Washington Post summarizes Sunday's developments:

Negotiations hit an impasse this afternoon, with Democrats accusing Republicans of insisting on Social Security being part of a deal and Republican accusing Democrats of refusing to make a counteroffer.

"We all know that we're running out of time," Senate Minority Leader Mitch McConnell (R-Ky.) McConnell said, offering to work "through the night" if needed. "I'm willing to get this done, but I need a dance partner."

While most were hopeful that Congress would make significant progress on Sunday, secondary provisions are already being made.

(Photo: Twitter/GrahamBlog)

Sen. Joe Manchin (D-W.Va.) has even introduced the "Cliff Alleviation at the Last Minute" (CALM) Act, described by the Washington Post:

The measure would phase in the looming tax increases over three years, rather than all at once, and allow the Office of Management and Budget to pick which programs would be cut rather than having the across-the-board cuts contained in sequestration.

“This is not a great plan, merely a better plan than going over the cliff,” Manchin said of the proposal. “It should never have come to this.”

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