. >> john harwood, thank you very much. and john outlined it perfectly because if there is a deal in the senate along the lines of what john just outlined within will it be able to pass the house? representative marlin stutsman is republican from indian and sits on the budget committee. welcome to "power lunch" sir, good to have you here. >> thank you, sue. good afternoon. >> in the details are in this package, will that package make it through the house? >> we will have to wait and see what senate does send back to the house. the house passed its first tax dill back in august. sent it to the senate. and of course we dealt with the sequester of last week and spread those cuts across the board to other facets of government as well. not just military and medicare. we really have to wait and see. pressure is on the senate to come up with a product, to take it to the floor, to sell it it to its members where the senate would be comfortable passing something and we really haven't seen anything publicly where the senate might be

john harwood, thanks very much for the update. i said earlier, we'll see a lot of john as the evening proceeds. >>> now, my great pleasure, welcome back to the show, i call him america's mayor. the former mayor of new york city. rudy jew rudy giuliani. most folks want you to run again, former mayor, but i don't think that's in the cards. let me begin with an easy question. what do you make of this millionaire's threshold? john boehner's plan b, spending cuts, tax rates? you tell me. >> i agree with heather. probably the best john boehner can do. difficult for the republicans. 80-plus just ran four years ago with a promise they wouldn't raise taxes. i can understand why he's having trouble getting those votes, but i think he has no choice but to the try to pass snag soomething pushes the ball back into the president's court. the passage of the spending decreases was important. that's really where the emphasis should be. in tan ideal world, shouldn't raise taxes, shouldn't give the government more money because they're wasting money

let's bring in john harwood.expect him to talk about john kerry being the next secretary of state. >> john mccain just put out a statement. >> great. here is president obama. >> -- took office, we were in the middle of two wars and al qaeda was in its safe havens. america was standing in a world of suffering. we began a new jer yaf leadership. we entered the war in iraq, put will al qaeda war on the path to defeat and we are winding down from the war in afghanistan. we have global challenges and stood up for human dignity. we still of course face great challenges. but today, i can say with pride that the united states is safer, stronger, and more respected in the world. in this work, i've been grateful for an extraordinary national security team. toml don lan has been part of that and one of the most important people is our outstanding secretary of state, my friend, secretary hillary clinton. hillary wanted very much to be here today. but she continues to recuperate. i had a chance to talk to her earlier today an

but it's not about anything fiscal cliff related as you heard from john harwood. basically thes gop expected that even though they were reluctant to agree to any tax increases, they were going back to their constituents and saying we are agreeing to taxes going up on anyone making $450,000 or higher and they expected that the tax conversation would be done for 2012 and that they would begin going into 2013 with the conversation over spending cuts. however, that press conference where he basically said it's not going to be on the backs of seniors and we need more revenue suggested that the president is going to seek loopholes closed, exemptions closed in the tax code and possibly further tax increases for more revenue. and my sources are telling me that that changed the outlook and the conversation. that the house believed this was the end of the tax debate. they would move to the spending cuts in the new year. now he says he wants more taxes. they say why would we give on that knowing the president is going to be pushing for higher taxes. how will we explain that.

and check in with john harwood.in your reporting indicates some sort of slimmed-down offer at this point? >> that's what republican leaders expect the ultimate solution to be and what the president and harry reid may offer today. keep in mind that harry reid on the senate floor today said the house should simply take up the bill the senate passed last year or a few months ago which would extend tax cuts for everybody, all families under $250,000 of income. i think that is quite unlikely because that was essentially a democratic bill. i think you'd have to see that bill tweaked or adjusted to have some spending cuts to turn off the sequester. maybe temporary spending cuts. you'd have to probably deal with unemployment insurance, which was not addressed in that bill, with the estate tax, which was not addressed. and remember the estate tax is about to go up sharply from 35% to 55% if no action is taken. and i would expect the democrats would want to take that, as well. there's some democrats who are very concerned abo

i want to go back to john harwood. is there a time here, john, when we're going to see the markets start to react or are we expecting most traders to wait until after the first to make big decisions? >> i think that's when they reacted. if we go over the cliff, even for a couple of days, you're going to see a reaction. i think at the end of the day you will see action if we go over the cliff for a couple of days, because i don't agree with jonathan that they are immune to public opinion. it is going to take a while for it to kick in. a lot of the members of the house want to become senators one day and republicans who are senators now understand that they are operating on a different political terrain and just as mitch mcconnell brokered a deal finally to resolve that hammer against your head torture that republicans were suffering along with the country during the fiscal cliff deal in 2011, that same thing is going to happen if we go over the cliff. republicans don't want to sustain anymore damage to their brand. they

john harwood in washington.ant to bring you up to date on the latest of the talks between vice president biden and mitch mcconnell. there's some concern among democrats who have heard that the income threshold for tax rate increases may be going up to 400, 450, $500,000. a source familiar with the talks just phoned me to say the democrats are only considering that under a couple of conditions. one is that if the threshold goes up to that level, the top income tax rate would go all the way back up to the clinton era rate of 39.6%. not some mid point of 37% talked about a couple of weeks ago. secondly, that it would be accompanied by more revenue from the estate tax than is happening under current policy. remember, current policy is 35% tax on estates of $35 million or more. democrats are going to be insisting on somewhat more revenue than that, if not all the way up to the level in president obama's budget. finally, that an agreement would include a significant extension of unemployment benefits. remember, there

>> working the phones day and night, let's goat john harwood in washington. lots and lots of headlines, fill us in. >> the latest mandy is that negotiations agreed on the middle class portion of the tax cuts. these are talks between biden and mcconnell. what they agreed to is 39%, 39.6, rather, of individuals over $400,000 in income. married couples above $450,000. estate tax to 40% for estates over $5 million p.m. and rise in dividend rates. can they resolve the disagreement offer spending cuts? democrats are resisting. they want a longer perhaps one-year delay and president obama was trying to rally those disappointed democrats with remarks that he just made by citing gains that he had won in terms of energy and education tax breaks he supported in the past and vowing to seek more revenue later on when we get to the discussion of entitlement cuts or what republicans believe is safer ground. saw some tweets saying he is trying to gum up the works. but there is the way the to and fro negotiation of president obama making sure his own troops are in line if he

thanks, john harwood.k now at financial sector and whether or not you should put your money in the banks. >> 12 months ago there was a lot of buzz about the regionals, but now it's the big banks that have done really, really well. we have the president and ceo at bell rock capital and jeffrey hart. welcome back. >> cassandra, how did we get that wrong, those saying was not a good environment for about the banks, 2012, low interest rates, you know, the low loan demand but yet the banks have done so well this year. why? >> well, it's time. time has been on banks' side. it took time for the real estate market to bottom and start to inch back up, and it took time for them to rebuild their capital positions and to let some of these problem loans work themselves out. that's still going on. not only did 2012 help but i think 2013 will be even better for them. >> i'm wondering, jeff, a lot of the headwinds that bill just mentioned, the regulatory environment and very low interest rates which squeezes their margins

john harwood.arwood, hello to you. talking about speaker boehner and his control of the party. does he has have it? >> no. nobody does. in fact, have you a reagan biograph biographer, craig shirley, prominent conservative, who said at this moment the republican party is a collection of warring factions. i spoke last night with a republican member of the house caucus who was bitterly critical of his colleagues who says there are 50 members of our caucus that don't have the political sense that god gave a goose. this is why john boehner can't lead them, could not lead them to support the plan b which he proposed. it shielded republicans from the argument that john yarmouth and other democrats might make, they are protecting million areas, raise taxes on $1 million incomes, and couldn't even get that far which is why this morning the president has a stronger hand he had a week ago with republicans unable to even pass that fallback. >> can anybody -- let's say there is talk that john boehner is safe in

i'm in washington with my friend, john harwood. don't want to pretend there's no bengals, but we are basking. i'm sort of adopting the reskins, rg 3. lawmakers are back at it this morning trying to come to some agreement to avoid the fiscal cliff. senate majority leader harry reid says there's still significant distance between the two sides, but talks are continuing. we'll have more on the fiscal cliff saga in a moment. elsewhere, private equity consortium has struck a deal to buy investment banking firm duffs & phelps for $665 million. as part of the deal, duff & phelps is permitted to seek higher bidders until january 8th. there's a potential merger between amr pilots group. this would combine the two carriers, take amr out of bankruptcy and finally prove appeared rue ross sorkin correct in saying this was going to happen all along. were you involved in the negotiations? you were almost an investment banker here, urging both sides to do this, weren't you? >> without a fee, though. >> what are you talking about without a fee, tho

. >> let's turn to jon harwood. sir, no more big deal. is this a little deal? two. what is this thing going to look like? >> well, happy new year, t.j. look, what this is going to look like is a tax-only deal that would likely raise the top rate for people of a certain income threshold, probably $400,000, which would mean only one of the existing income tax rates would go up. it would also deal with some other things like -- probably, like the estate tax, the tax on capital gains and dividends, but republicans know that taxes are going up, regardless of what they do. because the bush tax cuts expire on december 31st. they are looking to associate themselves with the least bad option. limit tax increases and the president has a strong hand, after coming out of the election, and having campaigned on higher taxes for people at the top. and republicans coming to terms with the fact he has the upper hand in these negotiations. >> let's say they cap it at $400,000, 500,000, $600,000, $700,000. what makes us think that the house will accept and pass the same deal? >>

for more, wasn't to bring in cnbc's washington bureau chief, john harwood.et's break it down here. if we have no deal tomorrow, by midnight tomorrow, what happens? what is the direct impact on the american taxpayer? >> the biggest impact, kate, would be on the 2 million americans who would lose extended unemployment benefits of around $300 a month. the average family through the loss of the payroll tax cut would lose about $20 a week out of their paycheck and as for the tax withholding, the higher tax rates for people through the income tax code, treasury could put off delaying -- taking more money out of people's paycheck bus they are not inclined to do so unless a deal is imminent on capitol hill. >> the markets were unsettled last week with all the indecision in washington. what are we looking at on wednesday when wall street opens again, if we have no fiscal cliff deal? >> i talked to independent economist, mark zandi, he said if there is no deal on wednesday, expect a slow bleed in financial markets, maybe 50 to 100 points lost on the dow per day for a

john harwood, steve liesman and larry kudlow. let's start with john with the progress or lack thereof. >> we've had a bit after crack up here in washington, brian, as you may have noticed. last night the house of representatives tried to move on speaker boehner's so-called plan b which would have raised taxes or permitted tax increases back to the clinton era levels on million dollar incomes. he was explaining to the press this morning about why he wasn't able to bring that up for a vote. and he said it was because members of his caucus had the perception a mistaken perception, that it was a tax increase. here is the speaker. >> there was a perception created that that vote last night was going to increase taxes. i disagree with that characterization of the bill. but that impression was out there. we had a number of members who didn't want to be perceived as raising real taxes. thalt the real issue. >> democrats picked up the reasoning behind the speaker's statement. he is saying it wasn't a tax increase because tax rates are sup

john harwood is at the white house to sort out all the latest. yesterday, john, they thought they were getting real close to a deal. it certainly doesn't sound that way today. >> sue, it does appear that they've hit a deadlock in negotiations. you saw the president in a fascinating news conference that he just had in the white house briefing room try to leverage the emotional power of the tragedy in newtown, connecticut, to try to put the pressure on republicans. he talked about them taking off their partisan war paint. he said he'd more than met them halfway in terms of spending cuts that he's offered, coming up in the income threshold for tax increases, and he has the upper hand in public opinion. there's no question about that. he is not surrendering that at this point. the question is whether speaker john boehner can move his caucus, even as far as he's already moved further toward the president. that's what the next couple days are going to be about. >> thank you very much, john. do you think, you think really sort of rumbling that we're hea

. >>> and with more on all of this is cnbc washington correspondent, john harwood. john, seeing how the markets reacted and with this country barely recovering from the last recession, if we go over the cliff, could it send the economy over the edge? >> depends how long we stay over the cliff, natalie. if it's all year, if they can't get their act together, that would pull $500 billion out of a fragile recovery. most economists say it would tip us back into recession. if they could fix the problem early in january, the effects would be fairly minimal, although one unknown variable, is to what extent there would be a loss of confidence globally in the united states if congress can't do it before january 1st. >> and john, there was talk all day about possibly a mini deal. is that still on the table and if so what would it look like? >> it is still on the table, what harry reid and mitch mcconnell are working on. the question is can they device something in the next 24 hours that would set an income tax hike threshold of 400 or $500,000. it would also include steps to

and john harwood. he and eamon have been monitoring all day. why are we close but not there yet? what's left, john? >> what's left is the agreement between the two parties on delaying those automatic across the board defense and domestic budget cuts which nobody wants. they deliberately set up so they wouldn't take place. democrats want to defer those for a year. republicans say we're only going to put them off to the extent you can find budget cuts that match the amount that the sequester would have been. now, the republicans are offering two or three months, 60 or 90 days and suggesting cuts. but democrats have not agreed to that. which is why the deal has been held up. even though the main portions of the tax element have fallen into place. and i'll recap what those are. a higher clinton era top rate of 39.6% for individuals above $400,000 income, couples above $450,000 income. capital gains and dividend rates going from 15% to 20% for people in the top income brackets. you've got an estate tax that goes from 35% to 40% for estates valued at over $5 million. you've got a phase

our chief political correspondent, john harwood, is with us. john, this feels very much like it might be the calm before the storm in more way than one. >> it could be if we go over the cliff and the storm would be generated by the markets and the loss of confidence in american governance and the american economy, but that's not necessarily going to be the case. we still have a few days left. a white house official told me that there have been no progress over the last couple of days, but an aide to senator harry reid told me there's still a 50/50 chance we get a mini deal that would put off the effects of the cliff at least temporarily and a 50/50 chance of that happening before january 1st. so even though there's a small number of days, sometimes the urgency of a deadline forces lawmakers to overcome differences they can't overcome otherwise. >> remind us, john, a mini deal is composed in the senate but still has to pass through house republicans and boehner or not? >> yes. and the question about the mini deal would be, what we're talking abo

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john harwood has the details. what's going on? >> not a whole lot of actions going on. although there have been some developments. let me bring our viewers up to date on those. first of all, treasury secretary geithner this afternoon announced the united states would hit the statutory debt limit on monday. that's new year's eve. that's part of an effort to pressure congress to act to raise the debt limit which may or may not be direct limb reply indicated in the fiscal cliff talks but it is relevant to the larger issue of debt and deficits. the treasury can move money around in certain ways to extend the point where we actually reach a crisis for probably a couple of months. but this is an early warning sign. secondly, republicans in the house sent word to democrats in the senate, white house, it is your turn now. we acted to put off the fiscal cliff several months ago with a bill that without objection tend all of those bush tax rates into the future and would turn off the sequester by switching defense cuts over to domestic programs. democrats, of course have no inten

we are moving closer to a deal according to john harwood's reporting. what do you do with the market today? >> i don't think you do anything based on those headlines. where you want to continue to be is high quality names and ride it out. if you see prices come your way in specific stocks that you twoont step up to, you should do it because once we get through the cliff i think the market's okay. it's off to the races. i would point out in december historically going back to 1928 the markets up an average of 1.5%, and it's up 75% of the time. here we are flat and that takes some of the wind out of the sales. >> you said yesterday for the first time in 30 years no position ness the market. is the most dangerous position today to be short the stock market going into the weekend? >> that would be very dangerous. although what john harwood said about a skinny deal, judge, i think this deal is going to be anorexic. i talked about that over and over again. any of these deals that are struck will be very slight, very small. and likely to be very bad as well. >

before we get to our chief washington john harwood and the president is meeting with another grouch ceos, i need to start with eamon javers on capitol hill where lawmakers are skipping down early for a long weekend. eamon, wasn't thanksgiving just a couple weeks ago? >> it was. let me check michael ichaey cal. you see rank and file members of congress leaving the capitol. they are done for the week. they're headed back loam to their hometown districts. a lot of folks focused on this negotiation right now but the reality is that the negotiations are taking place among just a very few, very high level people. i was talking to a few rank and file members yesterday who said they were frustrated there is not a whole lot for them to do, they are just sitting around here waiting for some break-through in these negotiations. they want something to do on the floor, in their offices and there is not much for them to sink their teeth into. now they're going into their district. leadership is going to stay here and continue these negotiations. speaking of wasting, speaker of the house john boehner c

president obama was made aware of the shooting as john harwood reported earlier today. he has spoken with the fbi director and may make a statement later today, but at this point the president has been in touch with the governor in connecticut. sue, we're still awaiting an update from connecticut law enforcement officials. back to you. >> yes. we expect that to happen within the hour. thank you very much. we will bring you that news when it does materialize. as you can imagine, it's an incredibly tragic situation in connecticut and they're taking their time to get exactly the right numbers before they go to the press and give us more information. so you can stay with cnbc. we will follow that story. we're also following the market for you, and as i mentioned, michael yoshikomi has been with us all week. we're going to do some analysis. there were some very bold calls on the street. good to see you again, michael. >> good to see you. >> going to start out with jan nghi capitol. starting with oracle. their notes say we believe oracle is the best way to play the current cl

john harwood has the very latest on what could happen today. >> we've got the house of representatives preparing to vote on what speaker boehner calls plan b, to ins lut it it has also spending cuts to win over republicans who are reluctant to go along. democrats say it won't go anywhere in the senate. president obama says even if it does, i will veto it. but leader cantor said at least it something. >> absent a balanced offer from the president, this is our nation's best option. and senate democrats should take up both of these measures immediately. >> now democrats in the senate say they're not coming back to work until after christmas. it appears that the house may leave town after passing this esh it appears that if we got a deal struck that can stick, we're not going to get it until next week. >> john harwood for us down in the nation cap there will be a news conference at 1:15 eastern during power lunch. keep it here to watch for that live coverage. murph, how are you trading the market here? a couple triple digit gains in a row for the dow. now we pulled back a little bit. kind

john harwood is live at the white house. john, first off, what did the president have it say about gun control? >> he headed joe biden to look into places where laws can be strengthened on guns. on mental health. on record sharing, all of the things that are related and called into question by the tragedy in newtown. he said he did not renounce his statement in the 2008 campaign that second amendment is an individual right, not just a right for militias or armed forces. but he stlaid there is a lot of room left. >> i said i'm willing to make some cuts. what separates is us probably a few hundred billion dollars. the idea we would put our economy at risk because you can't bridge that gap doesn't make a lot of sense. >> brian, sorry, that's a soundbite related to the fiscal cliff. of course the president also had comment about that. he said that republicans simply have not gone -- met him half way the way he met them half way. only few hundred billion apart from john boehner which isn't all that much over ten-year span. all of

john harwood live at the white house. ty?sue, joining us now to discuss the fiscal cliff tug-of-war is a democrat from new york state, senior house of the financial services committee, representative meeks, good to have you with us. let's turn to entitlement spending. that is of high importance in solving the fiscal cliff negotiations and in a longer term way bringing the country to a sustainable fiscal course. what specific changes to medicare or medicaid would you be willing to imbraes today right new that would slow the growth in our medical spenting? >> i'm not going to debate the specifics on television. i think that what the president is doing, is clear that he has indicated that we have to raise the tax rate. the tax rates, bush tax cuts, was temporary in nature. >> that's not what i asked. i asked what specific would you be willing to do to address what is clearly the number one thing that is going to blow the hole in not only the economy but federal spending, federal budget over the next generation. >> what we have t

have you heard that -- >> we can confirm that. >> i love john harwood, but luke and i have been reporting the same thing, jonathan, so there. >> okay. so we're going over the cliff? >> apparently. that's the bad news. the good news is, the parameters of a deal are definitely there. as you described, jonathan, the sticking point remains this so-called trigger, the sequester. remember, they agreed upon it last summer in july and august of 2011 when they came to that big debt ceiling deal. if there were no decision on how to cut government spending by now, these draconian cuts, indiscriminate across the board to defense half of it, $500 billion in domestic programs, the other half of it, the other $500 billion would go into effect. and now some want to have that delayed. they want to have it put off. the house of representatives, the leadership there is saying absolutely no way. there are ironies that abound all along here in these negotiations, and a lot of what you see on the surface, the president and mitch mcconnell, they're both sort of trying to set each other up here for the end game.

john harwood live at the white house. eamon javers on capitol hill and the president's comments. >> the president gave an interview to our colleagues at bloomberg and said a couple of things. first of all, his priorities now trying to break republicans in their resistance to raising the top rate by some amount, a stance republicans have been consistent on. more revenue, question, not higher rates, he is insisting on that as the price of negotiating with him. and he said the reason for that is if you take all of what can be raised in revenue from deductions that is politically realistic, not trying to take away the mortgage deduction in the face of tremendous resistance from consumers and the housing industry, you can only raise about 300 to $400 billion, but i think that is a promising indication from the president because then if you take, brian, $400 billion in deductions eliminated, you take, say, half of the rate increase, it would go to 39.6 by the president, that would raise about $500 billion. you put the 500 toget

go back to january harwood at the white house, president obama talking about the fiscal cliff.> i wanted to play a soundbite from the bloomberg interview that i mentioned to sue a few minutes ago. one yes offered a carrot to say if you do that in the short term, put revenue on the table concretely in that way, we will have a long process of tax entitlement reform that could end up reducing the rate in 2013. here is the president. >> not able to come up with a comprehensive tax reform package that gets it all done just in the next two weeks. we are not going to be able to come one necessarily comprehensive entitlement reform package that gets it all done in the next two weeks. when you luke at what ronald reagan did back in 1986, working with bill bradley and others, that was a year and a half process. what i have suggested is let's essentially put a down payment on taxes, let's let tax rates on the upper income folks go up. >> now, the difficulty of tax reform has been a concern of the white house throughout this discussion, all the way back to 2011. it's why they insisted on t

thank you so much, john harwood with the latest there. more now on the fiscal cliff.f the industries with the most at stake in the budget debate is the defense industry. in a meeting today in washington, northrop grumman ceo wes bush with a dire warning. >> it would result in across the board cuts to both defense and nondefense accounts. and the interesting thing about this is the cuts are not tied to any military strategy whatsoever. it is completely disconnected from a perspective of strategy. in essence these would be meat axe taken to our national defense budgets. >> let's go straight to the front lines of the issue. task specializes in systems, engineering and integrate. president and ceo david langstaff is with us, among the defense contractors speaking out today in washington. he joins me now on the telephone. sir, good to have on you the program. thanks for joining us. >> thank you. glad to be with you. >> what's the potential fallout for task if we go over the fiscal cliff. how would you navigate this? >> first, it's just terrible policy to go over the fiscal

john harwood has the latest. john? >> >> melissa, the first headline is, we are going over the cliff tonight, because we're not going to have action in both houses of congress on a deal. we don't have a deal yet. the house isn't going to vote. we don't know if the senate is going to hold any votes. the senate is still waiting for the outcome of the biden-mcconnell talks that are hung up over a couple of things including the issue of the across the board spending cuts which democrats want staved off for a year or so. republicans want to begin that cutting process right now. but let's talk for a moment about what we know about what has been agreed to, have to caution that until everything's agreed to, nothing is set in stone. bull here's what we know. the -- it appears that the top rate on taxes is going to go up to the clinton era level, 39.6% for individuals making more than $400,0 $400,000, for families making, married couples making more than $450,000. the estate tax, which some democrats don't like this provision, b

our john harwood is in washington with some more details on what we know right now. john? >> reporter: well, bill, the horror of this tragedy is also muted talk of anything else in washington for the day, including the fiscal cliff and all the issues that we've been discussing for some time now, but one of the jobs of a president is to console victims and to console the nation at a time of grief of this magnitude, so we're going to hear from the president at 3:15. jay carney earlier saying he wasn't going to discuss issues like gun control. it wasn't a day for politics. it's a day to focus on the victims of the tragedy, so you can expect the president is going to focus his remarks on the victims and what happened in connecticut and the attempt to figure out how it happened, why it happened. we'll hear from him at 3:15, and we're going to bring that to you, and we'll talk about it afterwards. >> all right, john, thank you very much. of course, we often talk about how the markets are a mood reflector, and if that's the case, we very much see a market that is subdued today by

john harwood at the white house who had a front row seat in all of this. what can you tell us. >> reporter: as bob pisani just mentioned the discussion today is about that plan "b" that speaker boehner is offering to only raise taxes on million dollar incomes and do nothing on spending cuts until next year. the president came out into the white house briefing room said, and after talking about gun control made the argument in response to questions that they have narrowed their differences too much to walk away from negotiations now. >> i've said i'm willing to make some cuts what. separates is probably a few hundred billion dollars. the idea that we would put our economy at risk because you can't bridge that gap doesn't make a lot of sense. >> that wasn't persuasive at least publicly to house speaker boehner who faces a lot of resistance to his caucus on million dollar incomes or 400,000 or 250,000 income. he could pass plan "b" and put the ball right back in the president's lap. >> tomorrow the house will pass legislation to make permanent tax relief for

john harwood, five days to go, i am calm today. is this the calm before the storm? >> first of all, merry christmas, brian. >> merry christmas, john. >> it is possible that it's the calm before the storm if by storm, you mean a flurry of last minute deal making. a senate democratic leadership aide told me that there's still a 50/50 chance we will get a deal before january 1st, but that's the only optimistic voice i've heard today. a senior white house official told me that when i asked is there any signs of holiday progress, you know the president said go home, members of congress should go drink an eggnog and hang with their family and come back in a better mood. one word answer, no. no signs of progress and the republican leadership aide in the senate, mitch mcconnell is going to be crucial to a potential last minute breakthrough. we haven't heard anything from the democrats. so at this moment, we're at a stalemate but things can come together quickly if people start to get desperate and politicians start to worry that they will get blamed for a very adverse react

. >>> john harwood is cnbc's political correspondent, what where do they go from here? >> republicans ultimately are going to give ground on tax rates, raise them for some portion of wealthy americans, somewhere eastern a miaround a year. two strong bets are the increase in the medicare eligibility ages from 65 to 67 and the reduction in the social security inflation formula, president agreed to those in the mid 2011 grand bargain talks that failed. john boehner has asked for them again, good bet that those will happen. >>> a month after voters went to the polls and approved same-sex marriage, couples across washington state got married today. the earliest weddings to take place were just after midnight and hundreds of couples stayed off late picking up their marriage licenses at 12:01 a.m. >>> now new details in the investigation of a death of one of kate middleton's nurses. she apparently took her own life after a prank call by a pair of australian deejays. and authorities want to talk to them. >> the australia januan broadca who own the radio station say they're grie

john harwood with the latest. we have the markets very uncertain. what do you make of today's action? buying or selling today's market? >> i'm still sort of in -- i'm in the long-term lower camp but i'm in the short-term buyer camp. i think something gets done. and the headline is worth probably 25-point rally in the s&p. that's what you have to do, is make a decision and fade that move. but in the meantime, i don't put a lot of emphasis on what happened today. this obviously, vacation short week, volumes are light, but as long as we stay around this 1425 level, i'm casually optimistic. >> to that point, josh, you made the point that you closed your books today, so, a lot of players are, in fact, on the sidelines officially for 2012. >> right. other than a handful of tax related things, there's nothing that we feel compelled to do, given the fact it's what we call garbage time right now. the outcome of the year is already known. people trading heavily are the people that are forced to. and so you tend to see this odd mix of stocks start to bubble up

our chief washington correspondent john harwood is here with the latest. >> reporter: we ended the week with a fairly perfect, simple, clear, elegant expression of the partisan differences in this fight. speaker boehner came out and gave a press conference where he essentially said president obama has done nothing to compromise with republicans. here's the speaker. >> four days ago we offered a serious proposal based on testimony of president clinton's former chief of staff. since then there's been no counteroffer from the white house. instead, reports indicate that the president has adopted a deliberate strategy to slow-walk our economy right to the edge of the fiscal cliff. >> reporter: not surprisingly, democratic house leader nancy pelosi had precisely the opposite explanation for what is behind this stalemate. she says republicans simply echoing the white house are going to have to buckle on the issue of the top rates. >> the only obstacle standing in the way of middle income tax relief are the republicans unwillingness to ask the top 2% to pay their fair share. >> but tyler, as yo

let's bring in chief washington correspondent john harwood.om the speaker given that we just heard from him yesterday? >> reporter: just got a note from one of his aides saying he's going to hammer the need for spending cuts as part of a package to avert the fiscal cliff. republicans are on weak ground in this debate. president obama's more popular. the democrats are more popular than the republicans. the president's proposal to raise taxes on people over $250,000 is very popular with the american public. 59% in our poll say they're for it. 76% say it would be an acceptable outcome. the one thing that republicans have going for them in the debate is the public likes the idea of spending cuts. so while the president puts public pressure on republicans, he's trying to respond in kind and say president obama has not detailed the spending cuts he wants. of course, republicans have not detailed the spending cuts either because the place you get real money, melissa, is in the entitlement programs of medicare and social security, and those are very p

we'll go meantime to john harwood.a package here, talking about the hopes of avoiding the fiscal cliff but what is on the agenda after the first of the year. john harwood takes a look at some of the predictions for the white house in 2013. >> president obama's re-election campaign was long on effective arguments but short on details of exactly what he will do after his second-term inaugural parade takes place on pennsylvania avenue. suddenly, three big priorities have come into focus. tax reform, immigration, and gun control. tax reform is driven by the fiscal cliff debate. it is the only way to maximize revenue while minimizing tax rate increases. but this white house has always been skeptical tax reform could become a reality given support for popular loopholes so count this obama goal unlikely to happen. comprehensive immigration reform took a back seat in president obama's first term. but after hispanic voters helped him win a second one, he can't avoid it now. republicans know fighting the issue could bury them in

john harwood of cnbc and the "new york times." doyle mcmanus of the "los angeles times" and karen tumulty of "the washington post." >> covering history as it happens. live from our nation's capital. this is "washington week" with gwen ifill, produced in association with national journal. corporate fuppeding for "washington week" is provided by -- -- corporate funding for "washington week" is provided by -- >> wherever our trains go, the economy comes to life. norfolk southern, one line, infinite possibilities. >> we know why we're here, to chart a greern path in the air and in our factories. >> to find cleaner, more efficient ways to power flight. >> and harn es -- harness our technology for new energy solutions. >> the people of boeing are looking to tomorrow to build a better tomorrow. >> that's why we're here. >> additional corporate funding is provided by -- prudential financial. additional funding is provided by the annenburg foundation, the corporation for public broadcasting and by contributions to your pbs station from vie

john harwood of cnbc and the "new york times." doyle mcmanus of the "los angeles times" and karen tumulty of "the washington angeles times" and karen tumulty of "the washington post."

chief washington correspondent john harwood joins us with the latest.ean, how optimistic can we be? this market is not falling out of bed as the clock ticks down. >> you know, i think everybody's counting on the holiday mood changing somewhat the tenor of the negotiations in combination with the fact that the republican position has kind of collapsed, with the collapse of plan b. the speaker tried to stake out a position in contrast to the president's. he couldn't get votes within his caucus for that. and so the republicans are getting weaker by the day. if they decide to wait until after january 1st, when all the tax rates go up, i think many republican members of congress think it's inevitable they're going to give in at that point, so the question is, do you want to drag this out, do you want to take the punishment, or the blame for a market sell-off that would occur if we didn't have a deal by the end of the year? i think all those factors, plus the idea of a mini deal that would only be temporary, suggests that the kick the can option at least for

by going back to sides bigger picture discussion on gun violence in america joining me are josh harwood. laurie southie and let's get back to it laura.

a lawyer john harwood of washington d.c. and here's what's coming up tonight on the big picture why republicans so worried about the united nations taking over our government and if they really think of defunct nonprofit group help steal the election for president obama all that more in tonight's lone liberal rumble and thousands of men women and children die every year as a result of senseless and completely preventable gun violence but have we become a nation that's afraid to talk about guns and to create the laws that are needed to effectively regulate that will protect american lives. you need to know this paranoid delusions swept the floor of the united states senate on tuesday as a group of republican senators blocked ratification of a u.n. treaty to help disabled people around the planet the convention on the rights of persons with disabilities requires signatory u.n. nations to provide for disabled populations in the exact same way as does the american one nine hundred ninety americans with disabilities act the treat

it is markets are closing out the year with a high note however, just moments ago cnbc report john harwood at the white house said his sources tell him there will be no vote tonight. so even if we get a deal, it looks like the deal will not be made before the new year, so technically we are going to go over the fiscal cliff, but if we get a deal in the next couple days, everything could be made retroactive. they remayes optimistic a deal will be reached. indeed dow jones industrial average going up 168 points. >> we haven't seen them panicking so far. >> not yet, but last friday there was concern we would not get a deal and we saw the market sell off, and then the futures, which indicate where we'll open the next trading session, they completely collapsed. they have come back on an optimism we will get a deal, but listen, there's still a lot of sticking point. the number of deductions people may raise. the republicans want to cut spending. nothing is worked out yet, but the market does remain hopeful. >> market closed for the last time of the year. can you give us a picture of the year as