. >> 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 a

john harwood joins us now live with all the details. good evening, john. >> reporter: good evening, larry. you know, the house has now passed on a party line vote, zero democrats in favor, about 20 republicans defecting the spending cut portion of john boehner's plan b. it would cut about $200 billion in spending, overt the automatic sequester cuts to defense programs that republicans have been opposed to. now, the debate bef bthe passage of that spending cut bill, and we still have yet to see the passage of the tax increase bill, which is gotten resistance from conservatives, that was an opportunity for both parties to frame the stakes, and eric cantor, the house majority leader, came on the floor and said, this puts the ball squarely in president obama's court. >> we house republicans are taking concrete actions to avoid the fiscal cliff. 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. >> of course, democrats have no intention of doing

let's bring in john harwood. xpect 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 and

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.

john harwood in washington. nt 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 a

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'

>> 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

. >>> 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 u

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

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 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 hear

carefully . >>> more breaking news on the fiscal cliff with our john harwood at the white house. you hearing, john? >> bill, i just spoke to a republican leadership source in the house of representatives who said the house will not be voting on any potential deal that the senate strikes today. the source said we're not voting on this in the dead of night. what that means is is that technically we will go over the cliff tonight without a legislative solution. the impact of that may not be great because if a deal comes soon after midnight tonight, that would forestall the changes in tax tables that would be the way in which ordinary taxpayers would see the effect of higher rates. and budget sequester talks won't happen in the first day or two of the year. this is significant though because there was some deal that a deal could be struck that could clear the senate on an expedited procedure and clear the house tonight. i'm now told there will be no house votes tonight which means as i said in a technical sense, we go over the cliff. >> good thing it gives them more time to thrash ou

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 abou

john harwood. rwood, 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

john harwood is on the phone with the very latest. john, what do we know? >> reporter: sot, there appears to be some movement what people are calling a mini deal or skinny deal that would involve only the tax side of the equation with tax increases for incomes over $400,000 for families which is the president's last offer to john boehner. it would also include things like, that would be temporary like the unemployment extension of unemployment benefits, the extension of the milk subsidies and a couple other things. the main question is over the duration. republicans want it to be short term. democrats are saying it has to be permanent or long term. but it does appear that there is some progress toward the possibility of a deal and this is certain to be discussed at the meeting at the white house this afternoon with leaders and the president although not sure whether they'll be in a position afterwards to openly push it fnchts there was a deal reached in principle when would they vote on it? >> i think if they made progress at the meeting today and if mitch

our chief political correspondent, john harwood is here with the very latest. it's the weekend. they're going home, john. >> they are going home. of course everyone's attention as you indicated at the top of the show on the terrible tragedy going on in connecticut. that dominated the early part of jay carney's briefing, the white house press secretary a few moments ago saying that the president was expressing enormous sympathy. we may hear from him later today. waiting to get further reports before commenting any further, but the fiscal cliff sort of took a back seat, at least for a while this afternoon. but we remain in this stalemate that we've been in for some time, sue. we talked with nick mulvaney earlier on cnbc. a republican member of congress from south carolina. it's not the case that they won't deal at all on taxes. president obama has to give us specifics on spending cuts. then we'll play ball. here's nick. >> there's a lot of us in the house who will vote for something if it fixes the problem. it's not just this little problem dealing with the fiscal cliff but the ove

the business community right in the middle of this negotiation. >> eamon javers, thank you. >>> john harwood has the latest on mr. obama's big meeting with some of those ceos. john? >> the other way the ceos are in the middle of this is the president appeared before the business roundtable today as part of his effort to continue rounding up support from various constituencies for what he calls a balanced approach. one of the things he pressed was a priority that the head of the business roundtable, john eng r engler, has suggested which is a longer term fix to the debt ceiling problem. remember that it was a catastrophic standoff in mid 2011 that caused the downgrade in u.s. credit. president said he's simply not going to negotiate in the negotiating process that results in the same kind of stand-off. here is the president. >> if congress in any way suggests that they're going to tie negotiations to debt ceiling votes and take us to the brink of default once again as part of a budget negotiation? which, by the way, we have never done in our history until we did it last year. i will not play

john harwood, thank you. >>> with this debt ceiling news, tim geithner is grossly incompetent or bending the numbers. how else could he have been so far off on the mark? that's my opinion. not john's. joining us now to discuss democratic strategist jimy williams. let me start with you. what do you think of this whole situation? is this politics by timothy geithner, secretary geithner? >> it is politics on every side. what is so frustrate sing this letter clearly underscores what many americans already know. we have a budget crisis because we have a spending crisis. while the talking heads on tv go on about tax cuts for the rich and we get them, will we not get them, had is about spending and have to address spending now. >> when you read his moats, the -- outline that he sends to harry reid, he says the government is spending $100 billion more per month than what it brings in. i mean, it is really incredible. what does this mean for the fiscal cliff discussions? >> well, i don't think it really means a whole lot. i think it is -- sort of the white house's way, treasurer's way, of putting

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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 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

>> at leastly deal we're talking about now, the one john harwood describe, it's kind of cutting the can it would result in very large tax issues, the ones we were just talking about. even the mini deal they are discussing now, would prevent the expiration of the bush tax cuts on 98% of households, many cuts we were just talking about -- i'm sorry. many tax increases we were just talking about wouldn't take place. it's not a tiny deal. but leaves off the larger issues of tax reform and entitlement changes that are more part of a grand bargain. >> we are talking about this countdown three dysaway. the market didn't respond too well to this. the dow, s & p, nasdaq, down 2% for the week. we think about investors and people think wall street, but a lot of americans have their money tied up in the stock market. what are we going to see? how much damage has been done? because of this uncertainty? >> the problem with financial markets and wall street, they basically priced in a deal a few weeks ago. that is, they convinced themselves that somehow these politicians would work things out. imagine

let's get the latest on this game of chicken from c nbc's chief political correspondent, john harwood. john? >> melissa, i want to bring you up to date on the fiscal cliff developments. first of all, as you mentioned, secretary geithner has informed the senate that the united states government will hit its debt ceiling on monday. that is december 31st. now, that doesn't mean that anything happens immediately, because the treasury can take various steps to postpone the moment of reckoning, probably a couple of months. it's still significant. that's an effort to pressure congress. secondly, the house republicans have met, leadership has met, sent a letter to democrats saying the house has acted, now it's up to the senate to act. that's, of course, the m theic-controlled senate which has no intention of taking up that house bill, which would extend all of the bush tax cuts. the president wants to only extent cuts for incomes under $250,000. senate democratic leadership aide tells me there's a 50/50 chance for a mini deal, temporary extension of the tax cuts, before january 1st, but we ha

john harwood live at the wlous with more on that, john, over to you. >> reporter: sue, we will have fullails tonight after 6:30 p.m. but for now, we've got one early release question which the results will not come as a surprise to anybody on our network because the desire by the public for law makers in washington to make a deal is very strong. when we ask people, do you want both sides to compromise on their positions, even if that means cuts in social security and higher taxes, or do you want them to stick to their position, 65% of the american people say they want both parties to compromise only 28% say stick to your positions. that is very consistent with the desire on wall street. and it is on main street as well, to get something done. and as you mentioned, sue, there has not been much external signs of a deal. though we did have an exchange of offers and that at least is something. >> indeed, john, it is. thank you very much. 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 t

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

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

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, 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 reacti

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 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

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

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. an, 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 a

let's bring in chief washington correspondent john harwood. m 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 po

well john harwood in 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 they really think a defunct nonprofit group helped 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 treaty

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

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 supp

and our own john harwood. john, to the fiscal cliff first. the president says there's no reason why we should go over the cliff, that we're only a few hundred billion dollars apart. what's the next step in trying to bridge that gap? >> well, there are private negotiations going on, scott, at the staff level. i think we're going to see how speaker boehner can play out this plan b, whether he can, in fact, pass it in the house. republicans as well as democrats have some issues with it, especially the republicans who don't want tax increases on anybody. but i think this was a fascinating moment because you saw the president not only proposing steps that he's going to take with joe biden vowing to put him in the state of the union address on gun violence, mental health, and all the related issues around there, but also leveraging the mood of post-newtown, to try to put pressure on the congress and say, we need to take off the partisan war paint just for a little while, do this for the country. there's one thing that we should have learned after t

let's get to john harwood in washington. all right. john, if the house passes plan b tonight, what's next? >> i think next both chambers of congress go home for the weekend and leave the leadership to work with the white house on the potential for a solution that might pass. you know, we had dualing press conference this morning, brian. one was harry reid, democratic leader in the senate saying, once the house passes plan b the senate will do nothing about it. >> we are not taking up anything they are doing now. it is time for republican foes get serious. it is very, very unfortunate the republicans wasted an entire week on a number of pointless political stunt. and that'hat they've done. >> what we've got is a situation where there is still potential, still time for a deal next week when members of congress come back. but for the moment, brian, mostly no hopium around here. >> plan b. a nonstarter. thank you, john howard. >> up next on "street signs," we will dive back into the heherba. we have an analyst comesing on who says buy herba