Year ends as it began, with lawmakers headed toward the 'fiscal cliff'

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It's New Year's Eve and with just hours to go before the end of the year and the arrival of the so-called fiscal cliff, Democrats and Republicans in Washington are still trying to strike a deal that heads off automatic increases in taxes, automatic deep spending cuts in a variety of programs and the automatic expiration of some jobless benefits.

As host David Greene said on Morning Edition, "we still do not know if taxes will be going up as the ball in New York City's Times Square goes down."

But, at least lawmakers haven't left things until the last minute, David said (with his tongue firmly planted in his cheek). After all, "we've got hours and hours before the last minute."

The two leaders at the center of the talks now are Vice President Biden and Senate Minority Leader Mitch McConnell, R-Ky., who will try to come up with some sort of deal before the Senate reconvenes later this morning. If they can, and if such a deal is passed by the Senate, then the House might also take it up today.

As you can see, though, there are several big "ifs" in such a scenario.

The good news, if there is any: As NPR's Scott Horsley pointed out on Morning Edition, going over the cliff isn't "an instant catastrophe." The "$500 billion hit to the economy" it would deliver is spread over a year and "many of those effects could be reversed" by later legislation, he said.

The continued uncertainty, though, is rattling the world's financial markets.

We'll watch how this all plays out as the day continues.

Meanwhile, here are some of the early headlines:

-- "After Fruitless Weekend, Congress Still Seeks Fiscal Deal." (Morning Edition)

-- "Fiscal Cliff-Hanger As Deal In Limbo." (Politico)

-- "Day Of Seesaw Talks Produces No Accord." (The New York Times)

Update at 8:40 a.m. ET. "Major Progress?"

Politico now reports that:

"Senate Minority Leader Mitch McConnell (R-Ky.) and Vice President Joe Biden engaged in furious overnight negotiations to avert the fiscal cliff and made major progress toward a year-end tax deal, giving sudden hope to high-stakes talks that had been on the brink of collapse, according to sources familiar with the discussion."

There have been several such moments when hopes were high, of course.

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