The US Fiscal Cliff 101: Where Things Stand Right Now

In case you haven't heard, there is this little thing called a fiscal cliff that the U.S. is swiftly approaching and everyone from Jon Stewart to S.E. Cupp has had their chance to throw in their two-cents on the issue (guilty as charged).

Although we could literally spend the next two-years discussing all the ins and outs of every single option and theory, I think it might be much more useful to figure out where congress and the White House currently stand on negotiations. So, for the moment, forget about the ifs, ands, whats or buts and let us focus on reality.

Rewinding back to the middle of November, when negotiations where just getting under way, it seemed as though the fiscal cliff talks could go smoothly. Especially when statements like, "I believe that we can do this" and "We understand our responsibility," were said by such rivals as Speaker of the House John Boehner (R-Ohio) and Minority Leader Nancy Pelosi (D-Calif.), immediately after meeting with the president over the issue. Of course, as per usual, things have pretty much devolved into the equivalent of a playground argument, reminiscent of certain scene from The Sandlot, ever since.

By the end of November, the Obama Administration, via Treasury Secretary Timothy Geithner, pitched their plan to congress. Politico reports that the administration's plan consisted of, among other things, allowing the "Bush-era tax cuts to expire on top earners" and "overhauling the tax code," of which would secure an additional $1.6 trillion in new tax revenue.

The Republicans quickly fired criticisms at the offer, with Boehner saying that he was simply "flabbergasted" by the proposal. Less than a week later, the Republicans sent the president their counter-offer, in the form of a letter. Because nothing says, "we mean business," like a tersely worded letter.

The Republican proposal called for $800 billion in new tax revenue, which cut the administration's initial proposal in half. Also, as an alternative to raising tax rates on top-earners, the plan proposed eliminating "special-interest loopholes and deductions." The president, who was apparently surprised that the Republicans were against raising taxes, described the offer as "out of balance."

Republican leaders have even taken fire from many of their own constituents over the counter-offer, beings that it seems to go against the party's previously perceived stance. This was also the most likely root cause for Speaker Boehner's ousting of three fiscally conservative Republican leaders from partaking in any further negotiations — shortly after the counter offer was revealed.

As of current, the main issue that's prohibiting any deal from being struck is taxes. The president contends that there will be no deal without raising taxes, while Republican leadership continues to fight for an alternative. Speaker Boehner and President Obama, in an attempt to reach a deal, even shared a phone conference on the issue. Although it seemed to bear little fruit (if any), considering Boehner described that call as, "just more of the same."  

As it appears, the only thing that the embattled parties can form a consensus on, is that going over the cliff would be bad — well, that and they seem to agree to disagree on a fairly consistent basis too. Frankly, as far as stopping the U.S. from taking the big plunge is concerned, it's not looking so good. Especially considering that the only thing that appears to be left on the table is each sides line in the sand.

What will happen by December 31st, 2012? Only time will tell, but unless the Mayans we're right on their prediction, we all better pack our parachutes and prepare to jump.