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What happens if 'fiscal cliff' deal not reached?

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    Where are negotiations headed?

  • Duration 3:47
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I'll -- -- senators are suggesting the only option now to avoid a fiscal -- is a scaled back deal.

To stop tax increases for most Americans we just heard -- -- lead to that.

Joining us now for more on this -- -- he's a senior editor for the daily caller.

And -- you know we are standing on the edge of a precipice and the people who can keep us from.

Falling over that edge or at a standstill or a standoff so what happens.

If the president and congress failed to reach an agreement on averting this so called fiscal -- Well.

We we go over it ended in no may be did the analogy of fiscal cliff that everyone's been using might not be perfect.

Because that doesn't and everything there'll be negotiations afterwards and in fact Republicans who.

Made me think that we are going over looked to be debt debt ceiling -- I know how that happens sometime in the beginning of next year perhaps at the end of January early February.

-- a point where negotiations.

Will really pick up again because they'll have some leverage there.

-- I I there's reports out that some agencies the Defense Department that are facing these cuts as a result of the fiscal cliff.

Are planning already ahead knowing that they'll be negotiations afterwards if if no deal -- deals reached -- believing that some.

-- a remedy will occur so they're not really starting to cut as much as they would believing that some deal even if it doesn't happen before generate third.

-- happen after January.

-- and Jamie -- each -- and you can be sure that they're actually lobbying and actually trying to get a deal done just as we've seen members of Wall Street -- and CEOs throughout the country saying.

Get in -- get in -- room and find a deal done but you're speaking up negotiations were prior to this stand off the negotiations between President Obama and house speaker John Boehner failed.

The so called plan B alternative failed in the house so now the senate has a hard task of doing something.

So what -- do you expect senators to possibly adopt.

And do they have a time to even get a plan into place.

It.

It's a good question there was quote today in the New York Times from a senior democratic aide who -- it's hard to understate how little is going on in the senate right now.

So so there is very little going on over this holiday do you have the hope that once they get back.

From from vacation that.

They'll put together a plan but there is a lot of instead of not to put together a plan.

A lot of Republicans in the senate who might be up for reelection.

In 2014 are worried that if they support raising taxes that they could have a primary opponent especially when they know that you know if they don't do anything.

Right after that that's good to go over the fiscal -- there be a bill put in place where they could vote to cut taxes.

Instead of having to what look what some might consider raise them before hand.

-- you know the one of those senators is is Mitch McConnell -- majority leader.

The president before leaving for Hawaii said he hopes everyone gets a chance to drink some -- -- from Christmas carols and -- you're with their constituents.

To realize that something can be done but he's remains optimistic that lawmakers can avoid.

The fiscal cliff and he's even offers scaled down version but that only saves 800 billion dollars over ten years.

As opposed to the high bar they set for four trillion dollars a cut our deficit so well.

Can't the United States -- better than this.

But they have to do better I mean what's interesting about all these discussion is that they have been focused entirely on taxes.

And even if you -- adopted all the president's tax cuts that cut tax increases.

That he won it.

It would do so little to touch our long term fiscal problem.

It really need to be entitled to reform.

And it's really a tragedy that everything's been focused on taxes when entitlement reform is really what needs to be addressed to address or talk a long term fiscal year -- that intact to seem to be the sticking point -- we thank you for your insights have a great day and -- Merry Christmas happy holidays to you.

-- and thank you.

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