DES MOINES, Iowa -- Republicans in Congress who took the politically risky step of voting this week to raise taxes now find themselves trying to fend off potential primary challenges next year from angry conservatives.

These lawmakers wasted little time in attempting to deliver an explanation that would be acceptable to the tea party and the GOP's right flank, and, perhaps, insulate themselves from a re-election battle against a fellow Republican. They've started defending the vote as one that preserves tax cuts for most Americans, while promising to fight for spending cuts in upcoming legislative debates over raising the nation's borrowing limit.

"In the end, he ensured that over 99 percent of Kentuckians will not pay higher income taxes," Mitch McConnell's campaign wrote in an email message to Kentucky voters the day after the Senate Republican leader supported the measure.

It was the first time in two decades that a significant number of Republicans voted for a tax increase; 33 Senate Republicans did so and 85 House members who broke with their GOP majority to support the bill that avoided the nation going over the so-called fiscal cliff but that also raises taxes on upper incomes.

"The ones that voted for it, I think they will rue the day," Alabama Sen. Richard Shelby proclaimed after opposing the bill. And Amy Kremer, chairman of the Tea Party Express, put it this way: "It's not too early to be looking at 2014. I think there are going to be a lot of primary challenges. People are fed up."

Most if not all of these Republicans who voted to raise taxes are likely mindful of their party's recent history of nasty primary battles that have pitted incumbents against tea party-backed insurgents. And none of them is likely to be immune to the scrutiny – rising stars, powerful committee chairmen and Republicans in reliably Republican seats – expected to confront them when they return to their districts to stand for re-election in November 2014.

The vote was a dilemma for Republicans, who have pledged for decades not to raise taxes, but faced being blamed with raising taxes on all Americans, had Congress and the White House not reached a deal on legislative to avert the scheduled increases on most Americans. The party got some cover from Grover Norquist, a leading anti-tax figure who described the bill, which preserved a series of tax cuts for most incomes, as "clearly a tax cut."

Even so, the tea party wasn't on board. Neither were many of the party's most conservative lawmakers in Washington.

"It's a really tough vote. And it's a really tough vote to explain to Republicans," Michigan Republican consultant Stu Sandler said.

Lawmakers who could be vulnerable to a challenge include Michigan Rep. Dan Benishek and South Dakota Rep. Kristi Noem, who bucked her tea party base and backed the bill, calling it "damage control."

"This makes her vulnerable and there will be discussion that she should have a primary challenge," former South Dakota Republican chairman Joel Rosenthal said. "Whether it materializes depends on votes down the road."

Some Democrats who opposed the deal also might be called to account by their own liberal bases for voting for spurning President Barack Obama and refusing to go along with his election-year pledge to raise taxes on America's top earners.

Among those who voted "nay," were liberals like Iowa Sen. Tom Harkin. He sharply criticized the bill as overly generous to wealthy Americans, and had supported Obama's original proposal to raise taxes on people earning at least $250,000 a year.

Harkin has not ruled out seeking a sixth term in 2014. And while his vote would likely prevent a primary challenge, it could be tricky for him in a general election.

Republicans – and specifically in the House, where tea party fervor is strong – seem more vulnerable.

While House Republican delegations, such as New York's and Pennsylvania's voted for the bill, they did so likely with impunity because the GOP bases in their states aren't nearly as ideologically conservative as those in other parts of the country.

Wisconsin Rep. Paul Ryan, the 2012 Republican vice presidential nominee, also voted for the measure. It won't likely be an obstacle to his re-election in his swing-voting district, but it could cause him trouble with conservative primary voters, should he run for president in 2016.

Rep. Steve Womack, in just his second term representing heavily conservative northwest Arkansas, could be forced to answer to tea party concerns over his yes vote if he seeks a third term. And he will almost certainly face questions about it should he run for U.S. Senate or governor, the subject of GOP speculation on which Womack has been silent.

Michigan Rep. Fred Upton's backing of the measure might rile up conservatives enough in his right-leaning district in the western part of the state that he could face a challenger. But his stature may be enough to prevent a serious one: he has easily fought off recent primary opponents and, as chairman of the Energy and Commerce commission, would likely have the fundraising edge.

Upton's Michigan colleague, Benishek, also voted for the bill and could have a bigger concern. He eked out re-election to a second term in November, carrying less than 50 percent of the vote in his northern district, and spurning tea party activists there could invite a threat from an opponent.

Among Senate Republicans, Sen. Saxby Chambliss of Georgia backed the measure and may have further agitated conservatives who were already cranky with him over his participation last year in the so-called "Gang of Six," a bipartisan group that discussed fiscal plans including tax increases and changes to entitlement programs.

After the vote, Chambliss pointed quickly to the next phase of the fiscal fight as the place for redemption for what he called a flawed but necessary measure.

Chambliss and others say they will press for tying dramatically lower spending to support for raising the nation's debt limit.

"This is just the first step in a major, major fight," Chambliss' senior adviser Tom Perdue said.

The swift defense from those who backed the increases is a response to GOP primary challenges from conservatives last year that proved costly to Republican members seen as dealmakers. Six-term Indiana Sen. Richard Lugar lost his primary to tea party favorite Richard Mourdock, and House Republicans Jeanne Schmidt of Ohio and John Sullivan of Oklahoma lost in primaries last year, attacked in part for voting to raise the debt ceiling.

___

Associated Press writers Bill Barrow in Atlanta and Alan Fram in Washington contributed to this report.

Some Republicans don't know a victory when they see one. All you hear out of presidential hopeful Marco Rubio and House Majority Leader Eric Cantor is doom and gloom but this is a case of not seeing the forest for the trees.

Tuesday the House passed the Senate's bill avoiding the so-called fiscal cliff -- the first time the house had a vote on New Year's Day since the Korean War. We know that the Senate passed this on an overwhelmingly bi-partisan basis with only eight "no" votes but in the House the vote was much more fractious at 257-151 with only 85 Republicans joining 172 Democrats.

What the 151 GOP "no" voters don't want to see is that they essentially scored a major victory for themselves and the American people, but blind ideology, churlish demagoguery and primary-election posturing has kept these Members of Congress from realizing it.

In a Washington world where the White House and the Senate are firmly in Democratic hands, the Democrats actually contorted themselves to please the Republicans by making the Bush-era tax rates permanent for nearly all Americans. The Democrats and the President changed their definition of "the rich" from $250,000 a year to $450,000 a year for families. And these families won't pay the higher marginal tax rate of 39.6 percent on income below $450,000, only above it and income after exemptions and deductions. In a place like New York $200,000 isn't rich but I think it's safe to say that those earning a half million anywhere in the nation have graduated out of the middle class.

The Democrats caved mightily on inheritance taxes. Estates of $5 million or below will be excluded from taxation. This is an increase of the exemption ceiling from the current $3.5 million. Family farms and certain family businesses get a $10 million exemption. Yes, above the $5 million threshold the tax rate rises to 40 percent from 35 -- but $1.5 million more is now exempt, or $525,000 in taxes that will no longer have to be paid on that $1.5 million. If you inherited $5.5 million your estate taxes will be $200,000 instead of $700,000 at the old rate. How is this a bad thing for Republican philosophy? Democrats should be upset!

Also the bill permanently, automatically increases the Alternative Minimum Tax bar which removes the annual taxation Sword of Damocles from tens of millions of upper middle class Americans. How is this a Democratic victory? Lastly, dividend income will no longer be taxed at the same marginal tax rates as earned income, it will be taxed at a flat 20 percent (more like capital gains). Is this not a victory for Wall Street and corporate America?

But if you listen to all the braying and whining particularly from Tea-Party affiliated Republicans in the House you'd think the world has come to an end and the GOP has surrendered whole cloth to President Obama.

What really happened is that finally at the eleventh hour senators acted senatorial and most representatives in the House came to their senses on behalf of the American people and our economy.

The GOP has got to find some things to offer the American people beyond draconian plans to cut the life out of everything. Let's see some ideas to bring prosperity and the good life to the Average Jane or Joe. What about Republicans advocating for three weeks paid vacation for everyone in the interests of increasing worker satisfaction and productivity?

Speaker John Boehner and Rep. Paul Ryan deserve a lot of credit for bringing the Senate bill to a vote in the House and for voting in favor of the legislation themselves. We need folks in Congress who are going to get things done not pretend to be Moe from The Three Stooges. Let's see what the new Congress can do, hopefully the fiscal cliff vote can set a positive momentum in motion for Congress and the country.

The House of Representatives passed $9.7 billion in aid for Hurricane Sandy victims by a 354-67 vote on Friday. All no votes came from Republicans. The Senate is expected to pass the measure later Friday and send it to President Barack Obama.

WASHINGTON -- You wouldn't know it by watching Sen. Patty Murray (D-Wash.) on the Senate floor Thursday, but history was being made and she was a big part of the reason why.

Murray was one of 20 female senators sworn in for the 113th Congress -- a record high. As chairwoman of the Democratic Senatorial Campaign Committee, she had specifically recruited women to run and, as it turned out, four of her five candidates won: newly elected Sens. Tammy Baldwin (D-Wis.), Elizabeth Warren (D-Mass.), Mazie Hirono (D-Hawaii) and Heidi Heitkamp (D-N.D.).

"I opened the door," Murray told HuffPost. "Others would have left it closed."

But as senators in both parties buzzed around the Senate chamber on Thursday, embracing each other and welcoming new faces, Murray sat quietly in the back and just watched.

"I was looking out at what was in front of me. And it was just great," she said. "I mean, when I first came here, there were six of us. And today I was just looking out at this roomful of us."

The Washington Democrat said seeing the new wave of female senators reminded her of how different the chamber was when she first stepped onto the floor in 1993, when she was left speechless after the late Sen. Ted Kennedy (D-Mass.) walked up and introduced himself. Even visually, she said, the Senate has shifted.

"To look at it today and see how it's changed, the colors, the bright colors," Murray said of the diverse attire of female senators, compared to male senators' typically bland mix of dark suits. "It looks more like America now."

HuffPost spent part of the day with Murray, shadowing her as she made stops around Capitol Hill at more than half a dozen receptions for newly elected Democratic senators. She met privately with reelected Sen. Claire McCaskill (D-Mo.) and her family for a few minutes, stopped by to say hello to Baldwin at her gathering, and when Warren wasn't around at her own reception, just worked the room for a while.

Two things were clear after spending hours with Murray: She walks incredibly fast -- HuffPost lost her a couple of times -- and some people view her as a rock star of sorts. Random individuals in the hallways of Senate buildings said "congratulations" as she passed. Strangers asked for photos or hugs, and others volunteered their plans to help prepare Democratic candidates for the next election cycle.

Some of those eager to see Murray weren't strangers. Jim Messina, President Barack Obama's 2012 campaign manager, greeted her warmly at a reception for newly elected Sen. Tim Kaine (D-Va.), who also sought out Murray when she arrived and thanked her for helping with his campaign.

Minutes later, Murray was speed walking down another hallway to another event.

For all the celebrating throughout the day, there was perhaps one moment that stood out the most for Murray. During the swearing-in ceremony on the Senate floor, Murray herself put on a lei and escorted Hirono to the front of the chamber to be sworn in by Vice President Joe Biden. She told HuffPost later that an ailing Sen. Daniel Inouye (D-Hawaii) had specifically requested that Murray escort Hirono down the aisle on his behalf, in the event that he wasn't there to do it. Inouye wrote his request in a note to his wife just before he died last month, Murray said.

"That was really special," she said. Asked why she thought Inouye had wanted her to take his place, Murray paused for a few seconds before responding.

"I think Danny just respected the work that women do," she said.

WASHINGTON -- Former Sen. Bob Bennett plans to register as a corporate lobbyist on Thursday, marking the end -- to the day -- of the two-year period during which the Utah Republican was banned from lobbying Congress by federal law. He's one of 15 former senators, eight Republicans and seven Democrats, who retired or lost their reelection bids in 2010 and will be eligible Thursday to begin lobbying Capitol Hill.

Although Bennett is the only one who has expressly stated that he will register to lobby this week, a number of his fellow recently retired senators have already taken on almost-but-not-quite-lobbying positions. None of them is officially listed as a lobbyist -- at least not yet.

This group includes former Sen. Chris Dodd (D-Conn.), who heads the Motion Picture Association of America; former Sen. Blanche Lincoln (D-Ark.), who chairs an arm of the typically right-leaning National Federation of Independent Business; former Sen. Byron Dorgan (D-N.D.), who joined the D.C. law firm and lobbying powerhouse Arent Fox; former Sen. Evan Bayh (D-Ind.), who advises clients on government affairs as a partner at the law firm McGuireWoods; and former Sen. Kit Bond (R-Mo.), who started a government relations firm a few months after leaving the Senate.

As Bennett last month prepared to register, he had harsh words for the congressional lobbying ban, telling the Salt Lake Tribune that it infringed upon his constitutional right to free speech.

"Lobbying is a constitutionally sanctioned activity, right in the First Amendment next to the freedom of the press," Bennett told his hometown paper. "I don't see any reason why I shouldn't exercise my constitutional rights."

Americans have a right to petition the government under the First Amendment, which is broadly interpreted as both a right to sue the government and a right to lobby its officials.

The short-term lobbying ban on former members of Congress is designed to prevent recently retired lawmakers from leveraging their personal and professional relationships with current lawmakers to serve clients immediately after leaving office. The ban is also intended to prevent the promise of future lobbying work from influencing how current members vote.

In 2007, Bennett co-sponsored the] extension of the ban from one year to two for former senators, but he changed his tune after he was defeated in the 2010 Utah GOP primary by Tea Party-backed candidates.

Within days of leaving Congress in January 2011, Bennett joined Arent Fox along with Dorgan, where the two serve as senior policy advisers in the firm's government relations practice.

That same week, Bennett formed the Bennett Consulting Group with a handful of his former Senate staffers. According to the firm's website, Bennett and his colleagues offer clients "substantive and experienced federal representation to help your company navigate the waters of legislation, regulation, procurement, advocacy, and everything in between."

The two-year ban on Bennett himself did not prevent his firm from registering to lobby on behalf of big banks, whose goal was to weaken the Dodd-Frank financial reform bill, mere months after Bennett, a longtime member of the Senate Banking Committee, left the Senate.

In early 2011, Bennett's firm registered to lobby for the Financial Services Forum, a coalition of CEOs of the nation's 20 largest financial institutions. Bennett Consulting Group also lobbied on behalf of JP Morgan Chase, according to Senate disclosure forms. The ban on Bennett himself is reflected in the fact that only his colleagues' names appear on the disclosure forms.

The former senator acknowledged to the Tribune that the ban amounted to little more than a paper-thin wall between him and his firm's lobbying clients. Is it really a problem, he asked, "if a former member calls one of his colleagues and says, 'Will you please take a meeting from one of my clients … as opposed to having [my] client call and say, 'I'm here because Senator Bennett recommended that you were the person I should talk to about this?'"

According to good-government groups and transparency watchdogs, there are plenty of problems with former lawmakers lobbying.

"To have a former member lobbying on your behalf is like hitting a home run -- but they're paid top dollar for their work and hiring one is expensive," said Sheila Krumholz, executive director of the Center for Responsive Politics, on the center's Open Secrets blog last month. "So while [former members of Congress] make effective advocates, the question is: are we getting policy based on the merits or the money?"

Bennett denied to the Tribune that he has outsized influence among his former colleagues. "The whole notion that there is somehow inappropriate influence is a myth," he said.

Whether or not the influence is inappropriate, it's certainly lucrative. Bennett Consulting Group has been paid more than $400,000 in lobbying fees since 2011, according to disclosure forms.

Bennett isn't the only former senator with lobbying news this week. On Wednesday, Kansas City, Mo., Mayor Sly James announced that Kit Bond Associates had been awarded a contract to lobby Congress on behalf of Kansas City. Bond, the mayor said, "has long been a friend of Kansas City and will be a powerful voice in Washington to assist in accomplishing our goals."

The timing of the announcement was notable, coming a day before Bond could officially register to lobby Congress on behalf of any client. But the Kansas City Star quoted a mayoral spokesman who said that Bond, a former three-term senator and two-term governor of Missouri, will leverage his ties to congressional Republicans in order to secure transportation funding for the state.

BY MATTHEW DALY, THE ASSOCIATED PRESS

HONOLULU (AP) — President Barack Obama has signed a bill that boosts taxes on the wealthiest Americans, while preserving tax cuts for most American households.

The bill, which averts a looming fiscal cliff that had threatened to plunge the nation back into recession, also extends expiring jobless benefits, prevents cuts in Medicare reimbursements to doctors and delays for two months billions of dollars in across-the-board spending cuts in defense and domestic programs.

The GOP-run House approved the measure by a 257-167 vote late Tuesday, nearly 24 hours after the Democratic-led Senate passed it 89-8.

Obama, who is vacationing in Hawaii, signed the bill using an autopen, a mechanical device that copies his signature.

WASHINGTON -- To prevent a spike in milk prices, the "fiscal cliff" budget deal awaiting President Barack Obama's signature includes an unexpected cut of more than $100 million from food stamps.

The legislation reduces funding for efforts to promote healthy eating under the Supplemental Nutrition Assistance Program (SNAP) from $395 million to $285 million in fiscal 2013. The one-year cut offsets the cost of preserving a U.S. Department of Agriculture program that protects dairy farmers from price fluctuations. Had the latter program lapsed on schedule, the resulting "dairy cliff" would have boosted the cost of milk to as much as $7 a gallon.

The food stamps cut doesn't affect nutrition assistance benefits, and it's a small amount of money considering the Congressional Budget Office estimates the government will spend more than $80 billion on the program this year. Still, nutrition assistance advocates are not exactly thrilled.

"This funding cut to the program undermines and weakens a critical component of our nationwide efforts to promote healthy eating and prevent chronic disease just as investments to prevent obesity and promote healthy eating are beginning to show results," Matthew Marsom, an executive with the Public Health Institute, said of the Nutrition Education and Obesity Prevention Grant Program.

The goal of the program, informally known as SNAP-Ed, is to promote healthy eating habits and lifestyles among people who receive nutrition assistance. States receive grants to encourage SNAP recipients to eat more fruits and vegetables and to get more exercise, according to a USDA overview.

Marsom lamented that the Senate had earlier passed an agriculture reform bill that did not include the cut, which was a product of the last-minute fiscal cliff deal between Senate Minority Leader Mitch McConnell (R-Ky.) and Vice President Joe Biden. A spokesman for McConnell's office confirmed that the SNAP-Ed decrease pays for continuation of the Milk Income Loss Contract (MILC) program.

Rep. Reid Ribble (R-Wis.), a member of the House Agriculture Committee, said in a statement that he had led House and Senate lawmakers in pushing for an extension of the milk program. He told a farm industry publication that MILC is an important safety net for dairy farmers in the event that milk prices fall and feed costs rise.

Without congressional action to preserve the program, Ribble said, consumer prices for milk would "skyrocket."

Fiscal cliff negotiations between House Speaker John Boehner (R-Ohio) and Senate Majority Leader Harry Reid (D-Nev.) reportedly got heated last Friday.

According to Politico, several sources claimed to have overheard a verbal altercation between the two men in the White House lobby.

With no bipartisan agreement about the debt ceiling, spending cuts and tax increases in sight, Boehner reportedly pointed at Reid and said, "Go fuck yourself."

"What are you talking about?" Reid asked.

And Boehner again said, "Go fuck yourself."

The encounter occurred soon after Reid took to the Senate floor and argued that Boehner could have ended the fiscal cliff standoff by bringing up legislation passed by the Senate for a vote. Reid also accused Boehner of catering to members of his party rather than serving the country.

"The American people I don't think understand the House of Representatives is operating without the House of Representatives," Reid said. "It's being operated by a dictatorship of the speaker, not allowing the vast majority of the House of Representatives to get what they want."

Despite the name-calling and angry rhetoric, a deal on the fiscal cliff was approved by both houses of Congress on Jan. 1. The Senate passed the bill at 2 a.m. and the House followed suit 20 hours later.

WASHINGTON — New York area-lawmakers in both parties are erupting in anger, saying the House Republican leadership has decided to let Congress adjourn without holding a vote on aid for victims of Superstorm Sandy.

There is no immediate comment from either Speaker John Boehner (BAY'-nur) or Majority Leader Eric Cantor, who sets the floor schedule.

In remarks on the House floor, Republican Rep. Peter King called the decision absolutely indefensible, while Democratic Rep. Nita Lowey said she felt betrayed.

The Senate approved a $60.4 billion measure Friday to help with recovery from the October storm that devastated parts of New York, New Jersey and nearby states. The House Appropriations Committee has drafted a smaller, $27 billion measure, and a vote had been expected before Congress' term ends Thursday at noon.

Montgomery & Helderman, Washington Post
Congress approved a plan to end Washington’s long drama over the “fiscal cliff” late Tuesday after House Republicans surrendered to President Obama’s demand to let taxes rise on the nation’s richest households.The House voted 257 to 167 to send the measure to Obama for his signature; the vote came less than 24 hours after the Senate overwhelmingly approved the legislation.

Senate Republicans voted to raise taxes on most American households and added trillions to the deficit, proving they truly are the party of Reagan. Now it's up to the House to win one for the Gipper. This is HUFFPOST HILL for Tuesday, January 1st, 2013:

FREMDSHAMEN: VICARIOUS EMBARRASSMENT FOR OTHERS - A high-stakes, multi-layered game of chicken broke out in the Capitol today, as House Republicans grappled with how to handle a fiscal cliff bill sent their way by an overwhelming bipartisan vote, even while it's wildly unpopular within their conference. The damndest problem for the GOP was that last week, when John Boehner failed to get his people to back his Plan B, he said this: "Now it is up to the president to work with Senator Reid on legislation to avert the fiscal cliff." He didn't add: "At which point, we will reject it in dramatic fashion, embarrassing ourselves and the country in the process, before caving and passing it." Republican leadership aides spent much of the day trying to think of ways to amend the bill that would be palatable to enough Republicans and also be able to pass the Senate. No such thing exists, of course, so they are finally going to take the advice Nancy Pelosi gave them weeks ago: Give your extreme members something to vote on for the hell of it, and then give a clean vote on the thing you want passed. If Pelosi can find a way to fund illegal wars, dammit, Boehner can figure out how to pass some tax cuts. House leadership aides are whipping their conference to determine whether they have the votes needed to amend and pass the bill. Once they've gone through that motion -- they don't have the votes, unless the amendment repeals Dodd-Frank or something -- they'll figure out a way to allow a clean vote on the Senate bill and then we can all absorb ourselves into the debt ceiling, sequester and CR fight. We call this governing. [HuffPost's fiscal cliff liveblog]

Charles Krauthammer: "A complete rout by the Democrats."

MACHO TALK FROM EARLIER - "I'll be shocked if this isn't sent back to the Senate," said Rep. Spencer Bachus (R-Ala.), leaving the first of two meetings on Tuesday. "I don't think that's out of the realm of possibility," said a senior House GOP aide, confirmed by other high-level aides. They had no problem making life uncomfortable for Senate Minority Leader Mitch McConnell (R-Ky.), who they blame for getting them in this mess, said one GOP source close to the situation. "He jammed the House. He's gonna get re-jammed," he said of the possibility the House amends the bill and sends it back to the Senate. But if House Republicans think they can put the onus back on the Senate by amending the bill, they are wildly mistaken, a Democratic Senate aide involved in the talks said. "They are full of hot air. Not a chance we come back," he said. The Senate is adjourned until noon tomorrow. [HuffPost]

Scott Garrett on Fox News, taken majorly out of context, just for kicks: "Nothing ever good happens at 2:00 in the morning...I'll wait until I go into that room down the hallway and get whipped."

@mmcauliff: Q: Is there going to be a vote tonight? Paul Ryan: "I don't know the answer to that. You gotta ask the leader guys."

HOUSE GOP MULLS OPTIONS OVER CHINESE FOOD AND CIGARETTES - Republican lawmakers came out of their caucus meeting on Tuesday afternoon looking sad and not saying too much about their plans. The House is voting now on stuff unrelated to the fiscal cliff -- including a congressional pay freeze -- but might have more votes later. "The Speaker presented his members two options," a House leadership aide told HuffPost's Jen Bendery. "The first would be to make an amendment to the Senate bill that would add a package of spending cuts. The Whip will do a whip check on this spending cuts amendment after the meeting. If we can get the commitment of 218 votes on this amendment, we will bring it to the floor and send it to the Senate. The Speaker and the Leader both cautioned members about the risk in such a strategy. They told them there is no guarantee the Senate would act on it. If we cannot get the commitment of 218 votes tonight, we will bring up the Senate-passed measure for an up-or-down vote in the House."

The pay freeze will keep annual salaries for rank-and-file members at $174,000. So brave.

AMENDMENTS COULD BACKFIRE - Mike McAuliff: "Not only could Republican changes to the fiscal cliff deal create a measure that the Senate refuses to take up, it could create a bill that's actually tougher on the GOP. Why? As the measure stands now, House Minority Leader Nancy Pelosi would push Democrats to hold their noses and back the bill, which is not enthusiastically supported. There could be around 150 Democratic votes in favor, meaning fewer than 70 Republicans would have to sign on. But if Republicans amend the deal with anything Dems like less, all bets are off, said one Democratic source. House Speaker John Boehner would then have to compel more of his caucus to back the deal, and he was unable to get that sort of support when he tried his Plan B proposal to set the tax-cut cut-off at $1 million -- more than double what passed the Senate early this morning. 'It would just kill this thing,' a Democrat said. 'It wouldn't pass.' House Rules Committee Chairman David Dreier (R-Calif.) was asked if amending the bill is the equivalent of killing it. 'To me, that's the case," he said, according to Fox News' Chad Pergram.'" [HuffPost]

With no false modesty, we'll just come out and say it: Told ya so: [McLaughlin Group]

Howard Fineman on Joe Biden's meeting with the Democratic House caucus: 'At 2:06 p.m. Tuesday, Biden swept out of back door of a Democratic caucus meeting about the fiscal cliff deal without giving any concrete indication of what had gone on in an hour and a half of talking and answering questions. I asked him if he had the votes and he said, 'you're an old hand and you know that I never predict the vote.' I asked him what the most effective argument was that he had made and he said, 'you'll have to ask the members that.' He smiled the usual Biden sincerely frozen grimace and added, 'I'm a "foreign policy expert!" Why am I here doing this?' Then he disappeared up the escalator surrounded by a cloud of aides and security officers." [HuffPost]

WHAT NEXT IF DEAL COLLAPSES? More from Howard: "Some Democrats were already thinking out loud about what will follow the collapse of the Senate deal, which they now expect. If Republicans attempt to offer amendments -- as is expected -- Democrats will oppose a rule to allow that to happen procedurally. If the GOP then tries to pass an amended bill, 'they will have to do it with their own votes,' said Rep. James Clyburn, (D- S.C.), a member of the leadership. Either scenario would kill the deal. If the GOP doesn't offer an up or down vote on the Senate deal, well, that would kill the deal, too. And then what? "Well, I say that then we wait for the new Congress to come in on Thursday. We'll have better numbers, more members on our side," said Clyburn. "Then we offer a new bill that they will like even less. They didn't like the 450 (thousand dollar in household income) floor on the tax increase? Let's see how much they like it when we push it back down to 250 (thousand)!" [HuffPost]

BUDGET DEAL RAISES DEFICIT $3.6 TRILLION: CBO - And that doesn't even factor in the lost tourism dollars from all those canceled staffer vacations to Sugar Mountain. Mike McAuliff: "The fiscal cliff deal adds $3.6 trillion to the deficit, over the next 10 years, at least technically. That's because while most people assumed most of the Bush-era tax cuts would be extended, the Congressional Budget Office must look only at what the law says. The law called for letting all the cuts expire, which would have brought in more than $4 trillion. The fiscal cliff deal lets most of that revenue go, letting rates increase only for single filers above $400,000 and $450,000 for couples." [HuffPost]

See the report here

DAILY DELANEY DOWNER - More than 2 million unemployed people have been cut off from unemployment insurance, and are now forced to watch C-SPAN and read newsletters to find out when their benefits might start again. [Hang in there!]

BECAUSE YOUR HOLIDAY PLANS WERE RUINED - Bulldog puppy tries to psych out cat. There's a fiscal cliff metaphor in there somewhere but we're too sleep-deprived to articulate one.

Does somebody keep forwarding you this newsletter? Get your own copy. It's free! Sign up here. Send tips/stories/photos/events/fundraisers/job movement/juicy miscellanea to huffposthill@huffingtonpost.com. Follow us on Twitter - @HuffPostHill

WASHINGTON -- The No. 2 Republican in the House leadership says he opposes a Senate-passed measure to avert the so-called fiscal cliff.

Virginia Rep. Eric Cantor told reporters after a two-hour closed-door meeting Tuesday with his GOP lawmakers that he did not support the bill.

He said House leaders were looking for "the best path forward" and that no decisions had been made.

The Senate passed the measure early Tuesday by a sweeping 89-8 vote. House passage of the measure would send it to President Barack Obama for his signature. The bill would increase taxes on family income exceeding $450,000 and delay across-the-board spending cuts for two months.

House GOP leaders were considering amending the measure and sending it back to the Senate, but that step could produce a deadlock.

WASHINGTON -- A high-stakes, multi-layered game of chicken is underway in the Capitol, as House Republicans grapple with how to handle a fiscal cliff bill sent their way by an overwhelming bipartisan vote, even while it's wildly unpopular within their conference.

A vote that had been scheduled on the bill immediately to follow a conference-wide meeting was postponed indefinitely, reflecting the uncertainty surrounding the process. Republicans emerging from the meeting said that the most likely scenario is that the House will amend the bill to add spending cuts, then send it back to the Senate.

"I'll be shocked if this isn't sent back to the Senate,” said Rep. Spencer Bachus (R-Ala.), leaving the meeting. "I don't think that's out of the realm of possibility," said a senior House GOP aide, confirmed by other high-level aides.

They'll have no difficulty making life uncomfortable for Senate Minority Leader Mitch McConnell (R-Ky.), who they blame for getting them in this mess, said one GOP source close to the situation. "He jammed the House. He's gonna get re-jammed," he said of the possibility the House amends the bill and sends it back to the Senate.

But if House Republicans think they can put the onus back on the Senate by amending the bill, they are wildly mistaken, a Democratic Senate aide involved in the talks said. "They are full of hot air. Not a chance we come back," he said.

Following the GOP meeting, Democratic and Republican leaders conferenced by phone to swap notes, trying to determine who has what votes. Democrats think they can get 140-150 members of their caucus, but are not sure that the GOP side can get enough votes to pass the Senate deal. Neither are the Republican leaders. Democrats don't want to be blamed for going over the cliff, but GOP Tea Partiers may see it as an act of courage to do so.

"It may go back with, as someone said, not a poison pill, just enough to give 'em a little heartburn and get it done," said Rep. Bob Turner (R-N.Y.)

The biggest complaint is the lack of spending cuts.

"We've got to provide responsible spending balance long-term," said Rep. Nan Hayworth (R-N.Y.) "This bill does not do that." Republicans who filed out of the House GOP meeting sounded cautionary notes about the fiscal cliff deal, suggesting it faces serious trouble.

House GOP sources said that Rep. Paul Ryan (R-Wisc.), a leader of the conservative wing and a potential threat to House Speaker John Boehner, is expected to vote against the Senate deal if it comes to the floor, breaking the leadership unity that existed around Boehner's "Plan B." And Republicans leaving the meeting said that Majority Leader Eric Cantor (R-Va.), Boehner's leading rival, spoke against the bill, BuzzFeed's John Stanton reported.

"Leadership is currently listening to the members so as to figure out the best path forward," Cantor spokesman Doug Heye said.

Cantor told CNN's Deirdre Walsh flatly, "I do not support the bill," and said no decisions have been made on how to proceed.

Rep. Tim Huelskamp (R-Kan.) told the National Review's Robert Costa that there are "real divisions" between Boehner and Cantor, and that Cantor was vociferous in his opposition, with the upcoming leadership elections hanging over the meeting. He said that conservatives were heartened to see Cantor take on Boehner in front of the entire conference.

Michael McAuliff, Jen Bendery, Howard Fineman, Sam Stein and Sabrina Siddiqui contributed

WASHINGTON -- One of the remaining sticking points holding up a fiscal cliff deal appears to have been resolved, as negotiators have decided to extend unemployment benefits without offsetting the cost.

A source familiar with negotiations told The Huffington Post that lawmakers would treat the provision as "an emergency measure that shouldn't be paid for." A Senate Democratic and Republican source each confirmed the plan.

What that means is that the $30 billion pricetag for a year-long extension will simply be added to the deficit. Republicans have in the past objected to reauthorizing federal unemployment compensation because of its impact on the deficit, though in recessions since World War II Congress has generally added extra weeks of benefits without paying for them.

Over the past several days, lawmakers had tried to find ways to offset the cost of unemployment benefits. They remained at an impasse as recently as Monday morning. Republicans have said little publicly about unemployment insurance during negotiations to avert the fiscal cliff, the nickname for steep spending cuts and tax hikes scheduled to take effect at midnight on Monday.

Getting unemployment insurance extended for a year without the offsets represents a major victory for the administration, which has long touted the stimulative impact and moral necessity of the policy. The Congressional Budget Office says keeping the benefits through next year buys some 300,000 jobs and increases economic growth.

Federal unemployment compensation kicks in for jobless Americans after they use up the standard 26 weeks of aid provided by states. The benefits lapsed on Saturday, halting benefits for more than 2 million Americans. Any missed compensation can be paid retroactively once federal unemployment insurance is reauthorized.

Earlier this year, Republicans pushed for fewer weeks, and got them: Congress reduced the maximum duration of state and federal benefits from 99 to 73 weeks. Only nine states have high enough unemployment rates to qualify for the full duration, and as their rates decline so will the number of weeks of benefits. Republicans earlier this year also won reforms to the unemployment system, including a provision that will allow states to drug test unemployment claimants in limited circumstances.

WASHINGTON -- With hours remaining to avert the so-called fiscal cliff, President Barack Obama said a deal is “within sight” and urged lawmakers to come together to avert automatic tax hikes and spending cuts that kick in on Tuesday.

But his midday press conference, with a group of middle-class Americans looking on, was not without a bit of bravado as well. Obama took multiple shots at Congress for its clumsiness in negotiations and insisted that he'd demand more tax hikes if the legislative body used the impending debt ceiling standoff to demand spending cuts.

In the process, the president irked several Republican aides, who suggested that the entire fiscal cliff deal had been complicated because of his tone and criticism.

“Potus just moved the goalpost again. Significantly. This is new,” tweeted a top aide to McConnell.

Doug Haye, a spokesman for House Majority Whip Eric Cantor, tweeted, “If Obama's goal was to harm the process and make going over the cliff more likely, he's succeeding.” Another Cantor spokesperson said, “So....I'm confused....does POTUS want a deal or not? Because all those jabs at Congress certainly sounded like a smack in the face to me.

Sen. John McCain (R-Ariz.) said the president "sent a message of confrontation" to Republicans, who could be voting on a deal in the next 24 hours. "I'm not sure ... whether to be angry or to be saddened," he added.

A source close to House Republican leadership went even further, telling HuffPost that the lower chamber was in revolt over Obama's remarks and that the deal could blow up because of them.

To what extent these statements are bluster will be determined once the bill comes up for a vote. The president noted that "an agreement to prevent this New Year's tax hike is within sight," but added that "it's not done."

Before he spoke, The Huffington Post reported on details of a preliminary deal from negotiations between Senate Minority Leader Mitch McConnell (R-Ky.) and Vice President Joe Biden that would achieve $715 billion in revenue.

Under the framework, the Bush-era tax cuts would be extended permanently for individuals at $400,000 and joint filers at $450,000. A second Senate Democratic source familiar with the state of play confirmed those details. The top rate on ordinary income would go back to 39.6 percent and raise an estimated $370 billion in revenue over 10 years.

The same thresholds would be applied for capital gains and dividends, with the top rates in that case going up to 20 percent -- a concession to Republicans (the rate on dividends was set to return to 39.6 percent) but not far from the president's position during the campaign.

Though the president did not get into specifics, he noted that the agreement that was currently under discussion would permanently raise tax rates on the wealthiest Americans.

Both parties are still arguing over how to deal with the $1.2 trillion in sequestration-related cuts that will be triggered on Jan. 1. The president sent a strong message to Republicans that replacing those automatic cuts must be done in a balanced way and not through spending cuts alone.

“If Republicans think that I will finish the job of deficit reduction, through spending cuts alone -- and you hear that sometimes coming from them -- sort of, after today we're just going to try to shove only spending cuts down, you know, well -- shove spending -- shove spending cuts at us, that will hurt seniors, or hurt students, or hurt middle-class families without asking also equivalent sacrifice from millionaires or companies with a lot of lobbyists ... if they think that's going to be the formula for how we solve this thing, they have another thing coming,” Obama said.

Obama added that his preference has been to solve the country’s problems through a grand bargain, "but with this Congress that was obviously a little too much to hope for at this time."

Louis Michael Seidman, New York Times
As the nation teeters at the edge of fiscal chaos, observers are reaching the conclusion that the American system of government is broken. But almost no one blames the culprit: our insistence on obedience to the Constitution, with all its archaic, idiosyncratic and downright evil provisions.Consider, for example, the assertion by the Senate minority leader last week that the House could not take up a plan by Senate Democrats to extend tax cuts on households making $250,000 or less because the Constitution requires that revenue measures originate in the lower chamber. Why should anyone care?...

President Obama is in the throes of the biggest financial challenge of his political career. The looming fiscal cliff will affect all Americans, quite likely to trigger a new recession if not averted. That is all Americans, not just the nouveau riche of the $400,000 set; it will affect us all. On the other side of the fiscal cliff, we would find finger pointing, blame, and change without hope.

Obama has reminded us that he won the election; he did. The definition of "rich" has been contracted from his initial $1 million salary; fair game? He promised to raise taxes on the rich in his campaign.

The president is at the very top of the government pecking order. In fact, he is the only person on the administration side of the bargaining table. It is a very lonely place with The House and Senate representing the American electorate with dramatically different posturing on the other side. President Obama's role as chief executive officer of the United States is to lead through these difficulties, reasonably review proposals to make certain we can tax appropriately while affording our expenditures. He is the driver, the head of this conglomerate called the United States. Being a strong supporter of collective bargaining, Obama must find himself in a conflicted role reversal of sorts.

In very relevant comparison to collective bargaining, there are expected norms that both sides must follow. That includes respect for negotiators, positions and interests, and fair evaluation of the proposals. This does not include disparaging comments and automatic rejection of proposals and solutions.

Speaker of the House John Boehner put a package on the bargaining table that reflects President Obama's previous bargaining position; a tax increase for those wage earners of $1 million or more along with spending cuts. But the rules of negotiations have changed. Obama won the election. In his victory speech, he said, "In the coming weeks and months, I am looking forward to reaching out and working with leaders of both parties to meet the challenges we can only solve together: reducing our deficit; reforming our tax code..."

He is now strengthening his resolve. His most memorable campaign promise was a tax hike for the "rich" and he won.

His goal of putting the U.S. on a path to cut deficits by $4 trillion over 10 years provides movement, but his plan proposes $1.3 trillion in new spending and an unlimited debt ceiling that is ready to blow. Not long ago, Obama warned that raising taxes in a struggling economy is "the last thing you want to do," but that is exactly what is happening. Most lawmakers think it is likely that we will not be able to resolve the fiscal cliff. A bitter pill provides difficult posturing.

An overwhelming number of voters, however, also realize that raising taxes will not in and of itself solve the budget crisis. While many Americans support tax increases for higher paid households, it is likely that changes in the tax code would resolve the issue more effectively. Sixty-seven percent think more will need to be done to close the budget deficit, compared to 19 percent that think tax increases alone will work and 12 percent who aren't sure.

According to the Tax Policy Center, the result of the fiscal cliff on American household would range from an increase of $1,064 for household income of $20,000 to $30,000; on a graduated scale to $254,637 for income of $1 million.

The president, the House and the Senate need to review the pulse of the American public. It's not only about a win in the presidential election. According to an NBC/Wall Street Journal:

• 68% view the fiscal cliff as very serious or serious
• 65% want to see compromise to reduce the deficit and cut spending
• Only 28% want to see Washington stick to their positions.

A similar Fox News poll revealed similar results:

• 89% want to see major cuts in spending
• 83% Democrats
• 91% Independents
• 95% Republicans

Rasmussen reports highest ever support for reduced government spending at 73 percent.

Washington, this is your electorate speaking. In any responsible and productive negotiation, facts and opinions are critical aspects of the outcome, most certainly the positions and opinions of constituents.

The fiscal cliff negotiation is a model for bad faith bargaining. Instead of accusations by Senate Majority Leader Harry Reid of wasting time and DOA proposals, public criticism and name calling, they need to take a critical look at the desires of the electorate. Reid referring to Speaker Boehner as a dictator does not foster cooperation in negotiations. Public perception is critical and the lack of fairness in this looming negotiation could result in taxpayer apathy. The result? Americans suffer, adjust withholding, reduce spending, slowing the economy.

In a sense, the elected officials that represent the American people are losing sight of what matters in the sake of their political views. The American electorate and economy is what needs to be in full view and primary consideration. The legacy that will remain long after the fiscal cliff negotiations are over is on the administration side of the table, the president. We will remember who the president was at the time of the fiscal cliff, but not too many other players.

BY ANDREW TAYLOR, ASSOCIATED PRESS

WASHINGTON (AP) — Senate Minority Leader Mitch McConnell has asked Vice President Joe Biden to become involved in a last-minute effort to avert tax increases on virtually every worker. Top Senate Democrat Harry Reid acknowledged McConnell had made an offer last night but said "at this point we are unable to make a counter-offer."

The public exchange between the top negotiators on averting the so-called fiscal cliff injected a note of pessimism little more than 24 hours before taxes are set to go up.

Democrats said the Republican proposal called for changing the formula for calculating Social Security benefits increases.

McConnell said there is no single issue blocking an agreement but that "the sticking point appears to be a willingness, an interest, or courage to close the deal."

Senate negotiators labored late into Saturday over a last-ditch plan to avert the "fiscal cliff," struggling to resolve key differences over how many wealthy households should face higher income taxes in the new year and how to tax inherited estates.

WASHINGTON -- Senate leaders groped for a last-minute compromise Saturday to avoid middle-class tax increases and possibly prevent deep spending cuts at the dawn of the new year as President Barack Obama warned that failure could mean a "self-inflicted wound to the economy."

Obama chastised lawmakers in his weekly radio and Internet address for waiting until the last minute to try and avoid a "fiscal cliff," yet said there was still time for an agreement. "We cannot let Washington politics get in the way of America's progress," he said as the hurry-up negotiations unfolded.

For all the recent expressions of urgency, bargaining took place by phone, email and paper in a Capitol nearly empty except for tourists. Alone among top lawmakers, Senate Republican leader Mitch McConnell spent the day in his office.

In the Republicans' weekly address, Sen. Roy Blunt of Missouri cited a readiness to compromise. "Divided government is a good time to solve hard problems – and in the next few days, leaders in Washington have an important responsibility to work together and do just that," he said.

Even so, there was no guarantee of success, and a dispute over the federal tax on large estates emerged as yet another key sticking point alongside personal income tax rates.

In a blunt challenge to Republicans, Obama said that barring a bipartisan agreement, he expected both houses to vote on his own proposal to block tax increases on all but the wealthy and simultaneously preserve expiring unemployment benefits.

Political calculations mattered as much as deep-seated differences over the issues, as divided government struggled with its first big challenge since the November elections.

Speaker John Boehner remained at arms-length, juggling a desire to avoid the fiscal cliff with his goal of winning another term as speaker when a new Congress convenes next Thursday. Any compromise legislation is certain to include higher tax rates on the wealthy, and the House GOP rank and file rejected the idea when he presented it to them as part of a final attempt to strike a more sweeping agreement with Obama.

Lawmakers have until the new Congress convenes to pass any compromise, and even the calendar mattered. Democrats said they had been told House Republicans might reject a deal until after Jan. 1, to avoid a vote to raise taxes before they had technically gone up and then vote to cut taxes after they had risen.

Nor was any taxpayer likely to feel any adverse impact if legislation is signed and passed into law in the first two or three days of 2013 instead of the final hours of 2012.

Gone was the talk of a grand bargain of spending cuts and additional tax revenue in which the two parties would agree to slash deficits by trillions of dollars over a decade.

Now negotiators had a more cramped goal of preventing additional damage to the economy in the form of higher taxes across the board – with some families facing increases measured in the thousands of dollars – as well as cuts aimed at the Pentagon and hundreds of domestic programs.

Republicans said they were willing to bow to Obama's call for higher taxes on the wealthy as part of a deal to prevent them from rising on those less well-off.

Democrats said Obama was sticking to his campaign call for tax increases above $250,000 in annual income, even though he said in recent negotiations he said he could accept $400,000. There was no evidence of agreement even at the higher level.

There were indications from Republicans that estate taxes might hold more significance for them than the possibility of higher rates on income.

One senior Republican, Sen. Jon Kyl of Arizona, said late Friday he was "totally dead set" against Obama's estate tax proposal, and as if to reinforce the point, Blunt mentioned the issue before any other in his broadcast remarks. "Small businesses and farm families don't know how to deal with the unfair death tax_a tax that the president and congressional leaders have threatened to expand to include even more family farms and even more small businesses," he said.

Several officials said Republicans want to leave the tax at 35 percent after exempting the first $5 million in estate value. Officials said the White House wants a 45 percent tax after a $3.5 million exemption. Without any action by Congress, it would climb to a 55 percent tax after a $1 million exemption on Jan. 1.

Democrats stressed their unwillingness to make concessions on both income taxes and the estate tax, and said they hoped Republicans would choose which mattered more to them.

Officials said any compromise was likely to ease the impact of the alternative minimum tax, originally designed to make sure that millionaires did not escape taxation. If left unchanged, it could hit an estimated 28 million households for the first time in 2013, with an average increase of more than $3,000.

Taxes on dividends and capital gains are also involved in the talks, as well as a series of breaks for businesses and others due to expire at the first of the year.

Obama and congressional Democrats are insisting on an extension of long-term unemployment benefits that are expiring for about 2 million jobless individuals.

Leaders in both parties also hope to prevent a 27 percent fee cut from taking effect on Jan. 1 for doctors who treat Medicare patients.

There was also discussion of a short-term extension of expiring farm programs, in part to prevent a spike in milk prices at the first of the year. It wasn't clear if that was a parallel effort to the cliff talks or had become wrapped into them.

Across-the-board spending cuts that comprise part of the cliff were a different matter.

Republicans say Boehner will insist that they will begin to take effect unless negotiators agreed to offset them with specified savings elsewhere.

That would set the stage for the next round of brinkmanship – a struggle over Republican calls for savings from Medicare, Medicaid and other federal benefit programs.

The Treasury's ability to borrow is expected to expire in late winter or early spring, and without an increase in the $16.4 trillion limit, the government would face its first-ever default. Republicans have said they will use administration requests for an extension as leverage to win cuts in spending.

Ironically, it was just such a maneuver more than a year ago that set the stage for the current crisis talks over the fiscal cliff.

WASHINGTON -- In a bid to head off the "nuclear option" for changing the Senate filibuster, a bipartisan group of senators Friday offered watered-down reforms they suggested would restore Washington to a place the fabled Mr. Smith of the 1939 movie would recognize.

"What we're proposing on a bipartisan basis is a way to end the major sources of gridlock around here," said Sen. Carl Levin (D-Mich.), one of eight senators who crafted the proposal that would give the Senate two new ways to end filibusters.

The filibuster has been used nearly 400 times in the 112th Congress, which will go down as the least productive since the 1940s. The classic filibuster -- made famous in the film "Mr. Smith Goes to Washington" starring Jimmy Stewart -- involves a lawmaker taking to the floor and doggedly making his point.

In the modern Senate, the invoking of cloture to stop such debating requires 60 votes. But it's been decades since the objecting senator has had to take floor.

The proposal by Levin and Sens. John McCain (R-Ariz.), Chuck Schumer (D-N.Y.), Lamar Alexander (R-Tenn.), Ben Cardin (D-Md.), John Barrasso (R-Wyo.), Mark Pryor (D-Ark.) and Jon Kyl (R-Ariz.), doesn't propose a new rule requiring a talking filibuster, but a document they distributed explaining their proposal said the leaders of the two parties would require it.

"If a senator wants to block legislation, he or she should go to the floor of the Senate, and be there for that objection," said McCain.

"You must talk," said Levin, adding that no new rule is needed because the talking requirement has never actually been dropped. It's only been waived by senators as a courtesy, McCain and Levin said.

The proposal would block filibusters on starting debates, on going to conference with the House, and on some presidential nominations. Two new methods would be allowed for the majority leader to stop filibusters of motions to begin debate of regular bills. One would let the leader call a vote on proceeding, with just four amendments allowed. The other involves the minority and majority leaders signing a motion to proceed with five other senators.

The proposals would only last two years.

Proponents for stronger reform were not impressed, and said the changes would do little or nothing to change obstruction in the chamber. And, they argued, the changes would not bring back the talking filibuster.

"It shifts the paralysis from the motion to proceed onto the early amendments," said Sen. Jeff Merkley (D-Ore.). "The heart of the current paralysis, the silent, secret filibuster, is not addressed by the Levin-McCain proposal."

Merkley pointed to historical filibuster battles to note that in order for the Senate to keep a filibustering lawmaker on the floor and talking, 51 other senators -- or a quorum of the Senate -- also has to be on hand.

"What this does is it allows bills to be killed with no evidence that it's happening in front of the American people or on the floor of the Senate," Merkley said.

"The talking filibuster goes right to the heart of that. It doesn't eliminate the 60-vote, but it makes sure that everybody knows who's obstructing, and that's where the accountability is," said Sen. Tom Udall (D-N.M.).

McCain and Levin stressed that their proposals still needed to be agreed upon by the leaders. They would be enacted as a standing order, which requires a 60-vote threshold.

Their idea in pushing a milder reform is to head off not just the efforts of senators such as Merkley and Udall, but to avoid the so-called nuclear option, where the Senate can change rules with just 51 votes at the start of the session, instead of the usual 67 votes needed to change rules. Supporters of the 51-vote change call it the constitutional option, since it is allowed, if not used.

McCain and Levin, however, see it as breaking the rules, and fundamentally changing the Senate to be more like the House.

"A number of us are very deeply troubled by the idea that we would do something in violation of the rules that provide a two-thirds vote to change the rules," Levin said.

"Hopefully, this will prevent us from going over a Senate cliff as of Jan. 3," McCain said.

Michael McAuliff covers Congress and politics for The Huffington Post. Talk to him on Facebook.

Sen. Jon Kyl, The American Spectator
About to leave the Senate after three distinguished terms, Arizona’s Jon Kyl offers some parting thoughts.AS I PREPARE TO RETIRE from 26 years of public life, I've been asked to offer some advice to newly elected senators and to comment on the Senate as an institution. While it's always a bit presumptuous for any retiring member to pass along counsel, here are a couple of thoughts.First, to new senators, you came here to get things done. To do that, to be effective, you must be able to influence others. I've found that the person with the most knowledge on a certain...

* Obama to meet congressional leaders at White House

* House of Representatives convenes Sunday on fiscal crisis

* Reid assails Boehner's "dictatorship" in the House

* Tax hikes, spending cuts to begin next week

By Richard Cowan and Mark Felsenthal

WASHINGTON, Dec 27 (Reuters) - President Barack Obama and lawmakers are launching a last-chance round of budget talks days before a New Year's deadline to reach a deal or watch the economy go off a "fiscal cliff."

Obama and Vice President Joe Biden will meet congressional leaders from both parties at the White House on Friday at 3 p.m. EST (2000 GMT) to try to revive negotiations to avoid tax hikes and spending cuts - together worth $600 billion - that will begin to take effect on Jan. 1.

Members were divided on the odds of success, with a few expressing hope, some talking as if they had abandoned it and a small but growing number suggesting Congress might try to stretch the deadline into the first two days of January.

In order to be ready to legislate if an agreement takes shape, the Republican-dominated House of Representatives convened a session for Sunday.

And House Majority Leader Eric Cantor advised members to be prepared to meet through Jan. 2, the final day before the swearing-in of the new Congress elected on Nov. 6.

It "doesn't feel like anything that's very constructive is going to happen" as a result of the meeting with Obama, said Tennessee Republican Sen. Bob Corker. "It feels more like optics than anything that's real."

The two political parties remained far apart, particularly over plans to increase taxes on the wealthiest Americans to help close the U.S. budget deficit. But one veteran Republican, Rep. Jeff Flake of Arizona, held out the prospect that if Obama came through with significant spending cuts, Republicans in the House might compromise on taxes.

The coming days are likely to see either intense bargaining over numbers, or political theater as each side attempts to avoid blame if a deal looks unlikely.

"Hopefully, there is still time for an agreement of some kind that saves the taxpayers from a wholly, wholly preventable economic crisis," Mitch McConnell, the top Republican in the Democratic-controlled Senate, said on the Senate floor.


But the rhetoric was still harsh on Thursday after months of wrangling - much of it along ideological lines - over whether to raise taxes and by how much, as well as how to cut back on government spending.

Senate Majority Leader Harry Reid, the top Democrat in Congress, accused Republican House Speaker John Boehner of running a "dictatorship" by refusing to allow bills he did not like onto the floor of the chamber.

Reid urged Republicans in the House to prevent the worst of the fiscal shock by getting behind a Senate bill to extend existing tax cuts for all except those households earning more than $250,000 a year.

Both Reid and Boehner, as well as McConnell and House Minority Leader Nancy Pelosi, are to meet Obama on Friday.


MARKETS EASE

U.S. stocks sharply cut losses after news of the House reconvening as investors clung to hopes of an 11th-hour deal. Even a partial agreement on taxes that would leave tougher issues like entitlement reform and the debt ceiling until later could be enough to keep markets calm.

"I'm not convinced it will result in a deal, but you could get enough concessions by both parties to at least avoid the immediacy of going over the cliff," said Randy Bateman, chief investment officer of Huntington Asset Management, in Columbus, Ohio.

Obama arrived back at the White House on Thursday from a brief vacation in Hawaii that he cut short to restart stalled negotiations with Congress.

He is likely to meet the toughest resistance from Republicans in the House, where a group of several dozen fiscal conservatives have opposed any tax hikes at all.

But Flake of Arizona said his fellow Republicans in the House and Senate are resigned to seeing some sort of increase in top income tax rates. But they will push back if Obama does not offer spending cuts.

"There will be resistance from a lot of House conservatives to a deal that does that," Flake said.

Strictly speaking, the fiscal cliff measures begin on Jan. 1 when tax rates go up but the House might stay in session until the following day if an agreement is being worked out.

"This January 1 deadline is a little artificial. We can do everything retroactively. We have to get it right, not get it quickly," said Republican Representative Andy Harris.

Another component of the "fiscal cliff" - $109 billion in automatic spending cuts to military and domestic programs - is set to kick in on Jan. 2.

The House and Senate passed bills months ago reflecting their own sharply divergent positions on the expiring low tax rates, which went into effect during the administration of former Republican President George W. Bush.

Democrats want to allow the tax cuts to expire on the wealthiest Americans and leave them in place for everyone else. Republicans want to extend the tax cuts for everyone.

In another sign that Americans are increasingly worrying about their finances as Washington fails to address the budget crisis, consumer confidence fell to a four-month low in December.

Americans blame Republicans in Congress more than congressional Democrats or Obama for the fiscal crisis, a Reuters/Ipsos poll showed.

When asked who they held more responsible for the "fiscal cliff" situation, 27 percent blamed Republicans in Congress, 16 percent blamed Obama and 6 percent pointed to Democrats in Congress. The largest percentage - 31 percent - blamed "all of the above."

* Fears that an absence of spending cuts could doom deal

* House Republicans decide to return, but little else

By Richard Cowan and David Lawder

WASHINGTON, Dec 27 (Reuters) - Republicans in the U.S. House of Representatives are resigned to seeing some sort of income tax increase in legislation to avoid a "fiscal cliff," but such efforts could be doomed in the absence of spending cuts, some Republican lawmakers say.

Congress and President Barack Obama are gearing up for a last-ditch attempt to avoid $600 billion in tax increases and spending cuts that could halt progress in the U.S. economy, which lately has been showing signs of gaining ground.

The White House said Obama will host a meeting on Friday with the four top congressional leaders - Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, House of Representatives Speaker John Boehner and House Minority Leader Nancy Pelosi. The Republicans have a majority in the House, while Obama's Democrats control the Senate.

House Speaker John Boehner informed his 241 Republican members on Thursday that the House would come back into session late on Sunday in anticipation of possible fiscal-cliff votes.

This Sunday's session "was about the only thing decided" during a half-hour conference call among House Republicans, said Representative Jeff Flake of Arizona, who will leave the House at the year-end to join the Senate.

In an interview shortly after the phone call, Flake said Republicans in the House and Senate were resigned to seeing some sort of increase in top income-tax rates, although he did not specify a dollar threshold.

While he said he did not want to see any income tax rates go up, Flake said: "I've felt we should've moved a week or two ago to accept the top rate going up and tell the president 'congratulations.'"

The bigger problem in avoiding the fiscal cliff, Flake said, would be if Obama demanded cancellation of the $109 billion in automatic spending cuts set to begin on Jan. 2 without alternative spending cuts to replace them.

"There will be resistance from a lot of House conservatives to a deal that does that," Flake said.

Asked if the days leading up to next Monday, Dec. 31 could thus be fruitless, Flake said, "That is what I am afraid of."

A Senate Democratic aide did not discount the possibility of some spending cuts being included in a limited bill to avert the fiscal cliff - even if they fell far short of the $1 trillion or so in cuts over 10 years that at one point was being discussed in talks between Boehner and Obama.


'TIRED OF WAITING'

Representative Tom Cole of Oklahoma, who also participated in Thursday's House Republican conference call, said its overarching theme was that the Senate should take the bill passed by the House earlier this year to extend all expiring income tax rates and amend it in a way senators see fit.

The House could then either accept that measure, or amend it, and bounce it back to the Senate.

"People are tired of waiting on the Senate to do things," Cole said.

Senate Democrats counter that last July they passed a bill extending the Bush-era tax cuts - except on net household income above $250,000 a year.

Nevertheless, the Senate must still couple its tax-cut bill with Obama's request for extending jobless benefits and possibly some other budget or tax measures.

"I assume the House would want to come back on Sunday knowing that we (the Senate) were going to do something on Friday or Saturday," said Senator Roy Blunt of Missouri, a member of the Senate's Republican leadership.

House Republican leaders informed their members that the chamber could stay in session dealing with the fiscal cliff through Wednesday, Jan. 2 - the last day of the current Congress and a day before the new Congress is sworn in.

Cole said Boehner "made very apparent he is not interested in passing a bill that didn't have a majority of Republicans" supporting it.

But Cole said this was "not quite as elusive to achieve" as many people thought. He said Boehner had "over 200 votes" out of 241 Republicans for his failed "Plan B" - a bill extending lower tax rates except for millionaires - which everyone knew would not become law.

Thus, a bill with prospects of being enacted could attract more support, Cole suggested.

If a new bill came to the House floor to raise taxes on upper incomes, Boehner could force passage with a combination of Democratic and Republican votes.

With public opinion polls showing that Republicans would get most of the blame if the country were to go over the fiscal cliff, some House Republicans have become nervous about their political fortunes.

Both Flake and Cole told Reuters that during Thursday's conference call, some Republicans urged Boehner to bring the House back to Washington sooner than Sunday - a request Flake described as being aimed at improving the "optics" of House Republicans being absent from Washington so close to the Dec. 31 deadline.

But Boehner stuck with his promise to give members at least 48 hours notice of a return.

Cole remained upbeat about a positive end to the fiscal-cliff mess that has gripped Washington for two months now.

"I'm a hopeless optimist. I still think there's a chance we'll get things done. All major deals get done at the end," said Cole, who was one of the first House Republicans to say that he could go along with raising some income-tax rates.