Bud­get talks:

Austin American-Statesman - - FRONT PAGE - By David Light­man Mcclatchy News­pa­pers

As the na­tion edges closer to the ‘fis­cal cliff’ four likely sce­nar­ios — from a big deal to no deal — emerge as pos­si­bil­i­ties.

WasHInGTOn — When Pres­i­dent Barack Obama and Congress re­turn to Washington later this week, the count­down to the fis­cal cliff will be mea­sured in days — yet no one really knows how, when or even whether an agree­ment might reached.

Sort­ing out the sce­nar­ios is like try­ing to as­sem­ble a 100-piece puz­zle on a dead­line.

There are four gen­eral ways the drama is likely to un­fold: no deal at all, the long-elu­sive big deal, con­sid­er­a­tion of leg­is­la­tion that one cham­ber al­ready passed or a small time­buy­ing ac­cord that would re­quire fur­ther ne­go­ti­a­tions.

If no alternative is adopted, Bush-era in­come tax cuts will ex­pire at the end of the year. On Jan. 2, $109 bil­lion in au­to­matic spend­ing cuts would take ef­fect, and half of them would in­volve de­fense.

Those are just the big items, how­ever.

Ex­tended un­em­ploy­ment ben­e­fits for an es­ti­mated 2.1 mil­lion Amer­i­cans be­gin ex­pir­ing at the end of this month. Also end­ing would be the 2 per­cent­age-point So­cial Se­cu­rity pay­roll-tax cut and the alternative min­i­mum tax “patch.” The AMT, orig­i­nally aimed at wealthy tax­pay­ers who avoided high taxes with de­duc­tions, wasn’t in­dexed to in­fla­tion, and there­fore it could af­fect 31 mil­lion peo­ple un­less Congress ap­proves a change.

Also loom­ing is the an­nual bat­tle over the “doc fix,” or Medi­care pay­ments to doc­tors. If no ac­tion is taken, those pay­ments might be cut by about 27 per­cent.

It’s dif­fi­cult to gauge sen­ti­ment for agree­ments. Though Obama pleaded with con­gres­sional lead­ers Fri­day to work some­thing out and they plan to try, Repub­li­cans in the House of Rep­re­sen­ta­tives re­mained defiant.

House Speaker John Boehner said Obama “re­fuses to chal­lenge the mem­bers of his party to deal hon­estly with en­ti­tle­ment re­form and the big is­sues fac­ing our na­tion. That is why we find our­selves here to­day.”

Obama, Boehner, Se­nate Ma­jor­ity Leader Harry Reid, Se­nate Repub­li­can leader Mitch McCon­nell and their staffs are ex­pected to talk pri­vately.

Here are the likely po­ten­tial sce­nar­ios:

No deal. Few on Capi­tol Hill will say it pub­licly, but there’s a lot of talk about how each side can ben­e­fit po­lit­i­cally if the stale­mate con­tin­ues past Jan. 1. And if the mar­kets don’t re­act once the cliff is reached, there might be even less in­cen­tive to get a quick deal.

There also might be a new in­cen­tive to act. Since higher tax rates would go into ef­fect, get­ting a tax deal might be­come eas­ier.

Big deal. Obama and Boehner weren’t that far apart when they traded of­fers last week, and for all the snip­ing there are mes­sages of hope em­bed­ded in the re­marks from both sides.

Pend­ing leg­is­la­tion. There are ve­hi­cles avail­able to law­mak­ers that would en­able them to move quickly. The House passed a mea­sure in Au­gust to con­tinue all the Bush in­come-tax rates for a year.

The Se­nate adopted a mea­sure in July to main­tain those rates for all but in­di­vid­u­als who earn more than $200,000 a year and fam­i­lies that make more than $250,000, the same lim­its Obama backed.

Small deal. There are more “fis­cal crises” on the hori­zon: A new debtlimit ceil­ing is likely to be needed in mid-Fe­bru­ary and cur­rent fis­cal-year spend­ing runs out March 27. Congress and the pres­i­dent might ex­tend the tax rates or avoid some spend­ing cuts and cou­ple that with one of the other up­com­ing crises in the hope that a big deal could be worked out later. Such a smaller deal also would be eas­ier to get through Congress be­fore Jan. 1.

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