'Fiscal cliff' deal: What will the compromise look like?

Right now, news reports indicate that neither side shows much inclination toward making concessions, but a new Wall Street Journal/NBC poll indicates that Americans want lawmakers and the White House to reach an agreement. Analysts predict a softening of positions as the deadline for automatic tax increases and spending cuts approaches.

The Associated Press/Washington Post: 'Fiscal Cliff' Vexing Official Washington As Both Sides Show Little Inclination To Compromise
Republicans still aren't budging on Obama's demands for higher tax rates on upper bracket earners, despite the president's convincing election victory and opinion polls showing support for the idea. Democrats in turn are now resisting steps, such as raising the eligibility age for Medicare, that they were willing to consider just a year and a half ago, when Obama's chief Republican adversary, House Speaker John Boehner, was in a better tactical position (12/13).

Los Angeles Times: Boehner: Obama's 'Fiscal Cliff' Deal 'Mainly Tax Hikes'
Republican leaders kicked off Wednesday with a fierce critique of President Obama's handling of "fiscal cliff" negotiations, part of the political posturing on both sides that has characterized efforts to avoid across-the-board tax hikes and spending cuts before a January deadline (Little, 12/12).

The Wall Street Journal: Democrats Confident They Have 'Cliff' Leverage
The Democrats' buoyancy isn't limitless, and there are signs it will soften as talks enter a more intense phase. With the end of the year approaching, more Democrats are saying they recognize they will have to agree to safety-net cuts to get a deal, and some on the party's left worry that is what will happen (Bendavid, 12/12).

The New York Times: News Analysis: Income Malaise Of Middle Class Complicates Democrats' Stance In Talks
Many Democrats have derided the expiring tax cuts as irresponsible since President George W. Bush signed them a decade ago. Yet the party is united in pushing to make the vast majority of them permanent, even though President Obama could ensure their expiration at year's end with a simple veto. That decision reflects concern over the wage and income trends of the last decade, when pay stagnated for middle-class families, net worth declined and economic mobility eroded. Democrats who generally would prefer more tax revenue to help pay the growing cost of Medicare and other programs are instead negotiating with Republicans to find a combination of spending cuts and targeted tax increases for higher incomes (Lowry, 12/12).

The Wall Street Journal's Washington Wire: Poll Finds Big Support For Compromise Deficit Deal
A large majority of Americans of all political persuasions says Congress should craft a compromise to reduce the federal budget deficit, even if that means making cuts to Social Security and Medicare and increasing some tax rates, a new Wall Street Journal/NBC News poll finds (King, 12/12).

Medpage Today: Docs A Powerful Voice In Nation's Fiscal Future
Physicians must decide whether they will support changes in healthcare policy that will help reduce government spending but may also hit their pocketbooks, according to one analyst. They can let lawmakers enact policies to cut healthcare costs, or stand in the way in order to save physician incomes even as care continues to be rationed informally, Arnold Milstein, MD, of the Clinical Excellence Research Center at Stanford University, wrote online in a perspective piece in the New England Journal of Medicine (Pittman, 12/12).

Kaiser Health News: Medicare Silver Bullets: What's The Best Way To Control Costs
KHN asked a range of health policy experts the following question: If you could make only one change to Medicare to control costs, what would it be and why? (12/12). Read edited excerpts of their answers.

Politico: Getting Past Grudges To Fiscal Cliff Deal
That said, the Jan. 1 tax increase is already baked in the cake. And while Washington is paralyzed by the big stare down, other crises are also piling up in these last weeks before New Year's. Milk prices will spike after Jan. 1 without a farm bill deal. Medicare payments to physicians will fall, affecting the elderly. And there is the very real threat of across-the-board cuts hitting the Pentagon and domestic appropriations. In each case, bipartisan deals seem possible while moving toward House Republicans on key points -; small building blocks but a potential path to progress. For example, Speaker John Boehner has proposed $200 billion in 10-year savings from adjusting the cost-of-living index for entitlement benefits and federal tax brackets. That $200 billion would come down once adjustments are made to protect low-income Supplemental Security Income recipients. But Obama could accept this change and use the savings to give the elderly a permanent solution to the Medicare physician payment crisis (Rogers, 12/12).