Senate passes package to avert fiscal cliff

STORY HIGHLIGHTS

• Senate approves deal to avoid the fiscal cliff


• Obama says more work will be needed and chides Congress for dragging its feet


• "Take the 84% of your winnings off the table," anti-tax crusader advises GOP

As the fiscal cliff looms, what's your New Year's message to Washington? Go to CNN iReport to share your video.

(CNN) -- A full two hours after a midnight deadline, the Senate overwhelmingly passed a last-minute deal to avert the feared fiscal cliff on a 89-8 vote.

The Senate package would put off budget cuts for two months and preserve Bush-era income tax cuts for individuals earning less than $400,000 or couples earning less than $450,000.

Senate Minority Leader Mitch McConnell, R-Kentucky, said it shouldn't have taken so long to get an agreement, but still praised the effort.

"We've done some good for the country," he said. "Now it's time to stop Washington's out-of-control spending."

The measure now goes to the House where it faces an uncertain future in the Republican-controlled body. A House vote could come as soon as Tuesday.

"The House will honor its commitment to consider the Senate agreement ..." said a statement from the House leadership, which includes Speaker John Boehner, Majority Leader Eric Cantor, Majority Whip Kevin McCarthy, and Republican Conference Chair Cathy McMorris Rodgers. "Decisions about whether the House will seek to accept or promptly amend the measure will not be made until House members -- and the American people -- have been able to review the legislation."

Read the bill (pdf)

Under the Senate package, tax rates on income above $400,000 for individuals and $450,000 for couples would go back to the Clinton-era rate of 39.6%, up from the current 35%, and itemized deductions would be capped at $250,000 for individuals and $300,000 for couples. That would generate an estimated $600 billion in additional revenue over 10 years.

Taxes on inherited estates will go up to 40% from 35%, but the exemption will be indexed to rise with inflation -- a provision the source said was added at the insistence of moderate Democrats.

Unemployment insurance would be extended for a year for for 2 million people, and the alternative minimum tax -- a perennial issue -- would be permanently adjusted for inflation. Child care, tuition and research and development tax credits would be renewed. And the "Doc Fix" -- reimbursements for doctors who take Medicare patients -- will continue, but it won't be paid for out of the Obama administration's signature health care law.

Vice President Joe Biden had been in negotiations with McConnell since Sunday afternoon. Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi, both Democrats, agreed to the plan in calls with President Barack Obama, a Democratic source said Monday night.

In the House, GOP sources said earlier Monday that there's little practical difference in settling the issue Monday night versus Tuesday. But if tax-averse House Republicans approve the bill on Tuesday -- when taxes have technically gone up -- they can argue they've voted for a tax cut to bring rates back down, even after just a few hours, GOP sources said. That could bring some more Republicans on board, one source said.

Economists warn the one-two punch of tax increases and spending cuts, known as "sequestration," could push the U.S. economy back into recession and drive unemployment back over 9% by the end of 2013. Obama had chided lawmakers for their last-minute scramble earlier Monday, hitting a nerve among several Republicans in the Senate.

Latest updates: Final fiscal cliff scramble

"They are close, but they're not there yet," he said. "And one thing we can count on with respect to this Congress is that if there is even one second left before you have to do what you're supposed to do, they will use that last second."

The president warned that if Republicans think they can get future deficit reduction solely through spending cuts "that will hurt seniors, or hurt students, or hurt middle-class families without asking also equivalent sacrifice from millionaires or companies with a lot of lobbyists ... they've got another thing coming."

That irked Republican senators who have been grappling for a deal with the Democratic majority in that chamber. Sen. Bob Corker, R-Tennessee, called the president's comments "very unbecoming of where we are at this moment" and added, "My heart's still pounding."

"I know the president has fun heckling Congress," Corker said. "I think he lost probably numbers of votes with what he did."

Read more: Why your paycheck is getting smaller, no matter what

As Monday's deadline drew nigh, federal agencies were preparing for the possibility of furloughing workers. At the Pentagon, a Defense Department official said as many as 800,000 civilian employees could be forced to take unpaid days off as the armed services face an expected $62 billion in cuts in 2013 -- about 12% of its budget.

Those workers perform support tasks across the department, from maintaining aircraft and weapons systems to processing military payrolls and counseling families. The Pentagon believes it can operate for at least two months before any furloughs are necessary, but has to warn its civilian workforce that furloughs could be coming, the official said.

Read more: What if there's no deal on fiscal cliff

The White House budget office noted in September that sequestration was designed during the 2011 standoff over raising the federal debt ceiling as "a mechanism to force Congress to act on further deficit reduction" -- a kind of doomsday device that was never meant to be triggered. But Congress failed to substitute other cuts by the end of 2012, forcing the government to wield what the budget office called "a blunt and indiscriminate instrument."

In its place, the Senate plan would use $12 billion in new tax revenue to replace half the expected deficit reduction from the sequester and leave another $12 billion in spending cuts, split half-and-half between defense and domestic programs.

Read more: Medicare patients may suffer if country goes over fiscal cliff

Despite Obama's backing, one leading Senate Democrat warned a deal could run into trouble -- not only from House Republicans who have long opposed any tax increase, but also from liberals in the Senate who oppose allowing more high-income households to escape a tax increase.

"No deal is better than a bad deal, and this looks like a very bad deal the way this is shaping up," Sen. Tom Harkin, D-Iowa, said. He was one of eight voting against the Senate deal

Conservative lobbyist Grover Norquist, whose Americans for Tax Reform pushes candidates to sign a pledge never to raise taxes, said the plan "right now, as explained" would preserve most of the Bush tax cuts and wouldn't violate his group's pledge.

"Take the 84% of your winnings off the table," Norquist told CNN. "We spent 12 years getting the Democrats to cede those tax cuts to the American people. Take them off the table. Then we go back and argue about making the tax cuts permanent for everyone."

But Robert Reich, who served as labor secretary in the Clinton administration, said the $450,000 threshold "means the lion's share of the burden of deficit reduction falls on the middle class, either in terms of higher taxes down the road or fewer government services." In addition, he said, the plan does nothing to raise the federal debt ceiling just as the federal government bumps up against its borrowing limit.

And that, Arizona GOP Sen. John McCain told CNN, is likely to be "a whole new field of battle."

"We just added 2.1 trillion in the last increase in the debt ceiling, and spending continues to go up," McCain said. "I think there's going to be a pretty big showdown the next time around when we go to the debt limit."

CNN's Mike Pearson, Jessica Yellin, Dana Bash, Deirdre Walsh, Lisa Desjardins, Ted Barrett and Ashley Killough contributed to this report.

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Senate Approves 'Fiscal Cliff' Deal, Sends to House

Two hours after a midnight deadline for action, the Senate passed legislation early New Year's Day to avert the so-called "fiscal cliff" with an overwhelming vote of 89-8.

Senate passage set the stage for a final showdown in the House, where a vote could come as early as today.

"While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay," President Obama said in a statement shortly after the vote.

"There's more work to do to reduce our deficits, and I'm willing to do it. But tonight's agreement ensures that, going forward, we will continue to reduce the deficit through a combination of new spending cuts and new revenues from the wealthiest Americans," he added.

The bill extends Bush-era tax cuts permanently for people making less than $400,000 per year and households making less than $450,000.

The steep "sequester" budget cuts scheduled to go into effect with the New Year would be postponed for two months.

The deal also would affect taxes on investment income and estates, and extend unemployment benefits for a year.
Officials also decided at the last minute to use the measure to prevent a $900 pay raise for lawmakers due to take effect this spring.

'Fiscal Cliff': Lawmakers Scramble for Last-Minute Deal Watch Video

The failure of a deal to pass Congress by Jan. 1 technically triggers an income tax hike on all Americans and automatic spending cuts, though lawmakers could still prevent a tax hike by making retroactive any legislation that passes in the weeks ahead, experts said.

The deal at hand will not entirely solve the problem of the "fiscal cliff," however. In fact, it could set up a new showdown over the same spending cuts in just two months that would be amplified by a brewing fight over how to raise the debt ceiling beyond $16.4 trillion. That new fiscal battle has the potential to eclipse the "fiscal cliff" in short order.

In addition to extending current tax rates for households making $450,000 or less, the latest plan would raise the estate tax from 35 to 40 percent for estates larger than $5 million; and prevent the alternative minimum tax from hammering millions of middle-class workers.

Capital gains taxes would rise to 20 percent from 15 percent.

The deal would also extend for one year unemployment insurance benefits set to expire today for two million people, and avert a steep cut to Medicare payments for doctors.

"Working though the night and throughout the day we've reached an agreement with Sen. McConnell," Senate Majority Leader Harry Reid, D-Nev., said early Tuesday morning prior to the vote.

"I've said all along our most important priority is protecting middle class Americans, this legislation does that," Reid added.

He said he is "disappointed" they were not able to make the grand bargain and that more work needs to be done in the future.

"But we tried, if we did nothing the threat of a recession is very real," Reid concluded.

Speaking after Reid, Senate Minority Leader Mitch McConnell, R-KY., called the deal an "imperfect solution" and noted this should not be the model on how things get done in the Senate.

McConnell also thanked Vice President Joe Biden, who visited Capitol Hill late Monday night and brokered the deal with McConnell.

The House Democratic leader Nancy Pelosi issued a statement saying that when legislation clears the Senate, "I will present it to the House Democratic caucus."

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2013 Smart Guide: Curiosity to reach Mars mother lode

Read more: "2013 Smart Guide: 10 ideas that will shape the year"

NASA'S Curiosity rover is about to have its cake and eat it too. Around September, the rover should get its first taste of layered sediments at Aeolis Mons, a mountain over 5 kilometres tall that may hold preserved signs of life on Mars.

Previous rovers uncovered ample evidence of ancient water, a key ingredient for life as we know it. With its sophisticated on-board chemistry lab, Curiosity is hunting for more robust signs of habitability, including organic compounds - the carbon-based building blocks of life as we know it.

Observations from orbit show that the layers in Aeolis Mons - also called Mount Sharp - contain minerals thought to have formed in the presence of water. That fits with theories that the rover's landing site, Gale crater, was once a large lake. Even better, the layers were probably laid down quickly enough that the rocks could have held on to traces of microorganisms, if they existed there.

If the search for organics turns up empty, Aeolis Mons may hold other clues to habitability, says project scientist John Grotzinger of the California Institute of Technology in Pasadena. The layers will reveal which minerals and chemical processes were present in Mars's past. "We're going to find all kinds of good stuff down there, I'm sure," he says.

Curiosity will explore a region called Glenelg until early February, and then hit the gas. The base of the mountain is 10 kilometres away, and the rover can drive at about 100 metres a day at full speed. The journey should take between six and nine months, but will include stops to check out any interesting landmarks. After all, some of the most exciting discoveries from Mars rovers were a result of serendipity.

"It's a discovery-driven mission," Grotzinger says. "We picked this site because we wanted to go to Mount Sharp. But we'll kind of follow our nose, and see where it leads us off on side trails."

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Three China ships in waters around disputed islands: Japan

TOKYO: Three Chinese government ships on Monday entered territorial waters around East China Sea islands at the centre of a dispute with Tokyo, Japan's coastguard said.

One of the surveillance ships entered waters around the islands known as Senkaku in Japan and Diaoyu in China at around 1:32pm (0432 GMT), while another followed about 20 minutes later, the coastguard said.

The third vessel entered the waters around the islands, controlled by Tokyo but claimed by Beijing, at about 2:35 pm (0535 GMT), it said.

The ships were spotted by coastguard aircraft which were patrolling the region, and were later ordered by a Japanese patrol vessel to leave the area, the coastguard said.

In response, the third Chinese vessel reiterated Beijing's claim.

"The ship responded in Chinese by saying in essence that Diaoyu and related islands are an inherent part of Chinese territory," a Japanese coastguard spokesman told AFP.

The three ships were still inside what Japan claims as its territorial waters as of 3:50 pm (0650 GMT), the Japanese coastguard said.

China has repeatedly sailed into waters around the disputed islands since Japan nationalised the chain in September.

Beijing sent its ships into the area as recently as December 21, after the conservative Liberal Democratic Party swept to a landslide election victory in Japan.

Newly elected Prime Minister Shinzo Abe has said he wishes to mend Tokyo's ties with Beijing.

But analysts predict that China is unlikely to change its claim to the islands and will probably continue to send its ships into the surrounding waters to bring the world's attention to the dispute.

Earlier in December, a state-owned Chinese plane breached Japanese airspace over the islands. Tokyo responded by scrambling fighter jets and said it was the first time Beijing had breached its airspace since 1958.

- AFP/xq

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Opinion: 12 lessons

What we learned in 2012

What we learned in 2012

What we learned in 2012

What we learned in 2012

What we learned in 2012

What we learned in 2012

What we learned in 2012

What we learned in 2012

What we learned in 2012

What we learned in 2012

STORY HIGHLIGHTS

• Dean Obeidallah: You are smarter today than 365 days ago


• Obeidallah: You probably learned a few Korean words like "Gangnam Style"


• He says we found out poultry can be a political tool and some people talk to chairs


• Obeidallah: The good news is that we'll soon forget the inane lessons of 2012

Editor's note: Dean Obeidallah, a former attorney, is a political comedian and frequent commentator on various TV networks including CNN. He is the editor of the politics blog "The Dean's Report" and co-director of the upcoming documentary, "The Muslims Are Coming!" Follow him on Twitter: @deanofcomedy

(CNN) -- You are smarter today than 365 days ago. You know more than you did at the end of 2011.

And here's the kicker, you may not even be aware of how much you learned this past year. It's analogous to how you're affected by the hit songs of boy bands. No matter how much you might try to avoid them, you can't, because these songs are everywhere. Consequently, the words are subtly drilled into your head and the next thing you know, you find yourself unconsciously singing along to the songs when they play on the radio.

So regardless if you were paying attention or not, there's a lot of new information from this past year trapped inside your brain. Here are just some of the things we collectively learned in 2012:

Dean Obeidallah

1. Mitt Romney had binders full of women

During the second presidential debate, Romney shared with us that when he was governor of Massachusetts, he had binders filled with information about women he was considering hiring. (When I was a teenager, I, too, had binders full of women. But mine I hid under my bed so my mom wouldn't find them.)

2. We picked up some Korean

We're not fluent yet, but thanks to the Korean pop singer PSY and his song "Gangnam Style," we all learned a few Korean words. And because of the song's ubiquitous music video -- which broke the record as the first video to get more than 1 billion views on YouTube -- some of us even have a vague idea of how to do his famous "horse dance."

3. Women love to read "porn"

The runaway hit book, "Fifty Shades of Grey," created a sensation across the country as women -- many over 30 years old -- bought this sexually provocative book, thus coining the term "mommy porn." In contrast, most men are waiting for the movie because we are more traditional in our "porn" tastes.

4. Poultry can be a political tool

Fast food chain Chick-fil-A went from just serving chicken to serving a political message as the head of the company announced publicly that he opposed marriage equality. Consequently, ordering a chicken sandwich at this chain came with a side dish of right-wing politics.

5. Some people talk to chairs

Clint Eastwood taught us at this year's Republican National Convention that you can have a full conversation on national television with your furniture. Hey, Clint made it OK for you to have a conversation with your couch or end table.

6. "James Bond" met the "The Real Housewives"

CIA Director David Petraeus resigned from his job because his extramarital affair was discovered. This is especially shocking because Petraeus' job as the nation's top spy chief was to keep secrets.

7. Cliffs are not just in nature

As we get closer to a precipitous "fiscal cliff" -- a term more overexposed than "Gangnam Style," it seems -- we have all learned that Congress has truly earned its low approval rating -- any lower and certain infectious diseases may become more popular than Congress.

8. What's the big deal with silver?

U.S. Olympian McKayla Maroney made it clear at the London Olympics that she was not impressed by winning the silver medal with her famous "I'm not impressed" face.

9. The way to reduce gun violence is more guns

At least this is what we were told by NRA's Vice President Wayne LaPierre in December as he called for armed guards to be placed in each of the roughly 100,000 public schools in the country.

10. Reality stars are not just for dysfunctional adults

Child star Alana "Honey Boo Boo" Thompson proved that children can be just as self-absorbed and horribly demanding as adult reality show stars.

11. Calendars are not always reliable

The fact you're reading this means that the Mayan apocalypse did not come to pass. That's good news. The bad news is that I now have to pay late fees on the credit cards I didn't pay because I thought there was a chance the Mayans were right.

12. America is the best democracy money can buy

This year's presidential election saw roughly $2 billion spent by the two campaigns and their supporters. That's more than the annual GDP of numerous countries.

You probably recalled more of these things than you guessed you would. While old acquaintances should not be forgot, the good news is that we will likely soon forget the details of the more inane lessons of 2012. Of course, the bad news is that they may be replaced by even more ridiculous ones in 2013.

Follow us on Twitter @CNNOpinion

Join us on Facebook/CNNOpinion

The opinions expressed in this commentary are solely those of Dean Obeidallah.

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Conn. gunman Adam Lanza's remains claimed: report

HARTFORD, Conn. The body of the man who killed 26 people at a Connecticut elementary school has been claimed for burial.

Connecticut Medical Examiner Wayne H. Carver II tells the Hartford Courant Adam Lanza's remains were claimed several days ago by someone who wanted to remain anonymous.

Lanza's burial site also is being kept secret, the newspaper reports.

A spokeswoman at Carver's office told The Associated Press she could not release details about the status of Lanza's remains.

The 20-year-old Lanza killed 20 first-graders and six educators at the Sandy Hook Elementary School on Dec. 14. He also killed his mother in their Newtown home before going on the rampage and then committing suicide.

A private funeral was held earlier this month in New Hampshire for his mother, Nancy Lanza.

17 Photos

Newtown, Conn., memorial vigil

Police have not offered a motive for the killings.

Carver has asked geneticists from the University of Connecticut to study Lanza's DNA for any mutations or other abnormalities that could shed light on his motivation for the shootings, the Courant says.

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Hillary Clinton Hospitalized With Blood Clot

(MICHAL CIZEK/AFP/Getty Images)

By DANA HUGHES and DEAN SCHABNER

Secretary Hillary Clinton was hospitalized today after a doctors doing a follow-up exam discovered a blood clot had formed, stemming from the concussion she sustained several weeks ago.

She is being treated with anti-coagulants and is at NewYork-Presbyterian Hospital so that they can monitor the medication over the next 48 hours, Deputy Assistant Secretary Philippe Reines said.

Her doctors will continue to assess her condition, including other issues associated with her concussion. They will determine if any further action is required, Reines said.

Clinton, 65, originally fell ill from a stomach virus following a whirlwind trip to Europe at the beginning of the month, which caused such severe dehydration that she fainted and fell at home, suffering a concussion. No ambulance was called and she was not hospitalized, according to a state department official.

The stomach virus had caused Clinton to cancel a planned trip to North Africa and the United Arab Emirates, and also her scheduled testimony before Congress at hearings on the attack on the U.S. consulate in Benghazi, Libya.

According to a U.S. official, the secretary had two teams of doctors, including specialists, examine her after the fall.  They also ran tests to rule out more serious ailments beyond the virus and the concussion. During the course of the week after her concussion, Clinton was on an IV drip and being monitored by a nurse, while also recovering from the pain caused by the fall.

Medical experts consulted by ABC News said that it was impossible to know for sure the true nature or severity of Clinton’s condition, given the sparse information provided by the State Department. However, most noted that the information available could indicate that Clinton had a deep venous thrombosis,which is a clot in the large veins in the legs.

“A concussion (traumatic brain injury) in itself increases risk of this clot. Likely the concussion has increased her bed rest,” said Dr. Brian D. Greenwald, Medical Director JFK Jonson Rehabilitation Center for Head Injuries. “Immobility is also a risk for DVT. Long flights are also a risk factor for DVT but the recent concussion is the most likely cause.

“Anticoagulants are the treatment,” he said. “If DVT goes untreated it can lead to pulmonary embolism (PE). PE is a clot traveling from veins in legs to lungs which is life threatening. Many people die each year from this.

“Now that she is being treated with blood thinners her risks of PE are decreased,” he said. “Blood thinners carry risk of bleeding but are common and can be safely used.”

Dr. Allen Sills, associate professor of Neurological Surgery at Vanderbilt University Medical Center, said it was most likely that the clot was not located in Clinton’s brain, since she is being treated with anticoagulants.

“This is certainly not a common occurrence after a concussion, and is most likely related to either inactivity or some other injury suffered in the fall,” he said.

Dr. Neil Martin, the head of Neurovascular Surgery at the University of California, Los Angeles, Medical Center, said blood thinners are often given for blood clots in the legs, and it is “very unusual” for anticoagulants to be given for blood clots in the head.

But he cautioned about speculating too much about Clinton’s condition before more information is available.

“If we don’t know where it is, there is the possibility of several different indications,” he said. “I don’t know if there is any connection between what she’s got now and the concussion. All I can tell you is, at this point, it’s almost impossible to speculate unless we know what’s going on there.”

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Today on New Scientist: 28 December 2012

Best videos of 2012: Rare view of Challenger tragedy

Watch a rare amateur video of the Challenger explosion, our most-viewed video of the year

Strong jet stream super-charged US Christmas storms

Record snowfall and dozens of tornadoes snarled holiday travel as a powerful winter storm plowed across much of the US, while rainstorms battered the UK

2012 review: The year in life science

The year's biggest stories in life science, including James Cameron's descent into the Mariana trench and efforts to break into Antarctica's buried lakes

Superstorm lessons for adapting to climate change

As the post-Sandy rebuild gets under way, coastal cities around the world will be watching

Best videos of 2012: First MRI movie of childbirth

Watch a unique view of a baby's birth, at number 2 in our countdown of the year's top science videos

Fleadom or death: Reviving the glorious flea circus

The parasite-based sideshows were almost done for by the domestic vacuum cleaner - but they are bouncing back, finds Graham Lawton

Approval for gene-modified salmon spawns controversy

Apparently months late, US regulators have declared genetically engineered fish safe to farm and eat, but final approval could be some way off

Best videos of 2012: New aircraft flies inside out

Watch a novel flying machine use a unique mechanism to propel itself, at number 3 in our countdown of the top videos of the year

2012 review: The year in technology

The year's biggest stories in technology, including Kinect devices that may spot signs of autism and controlling a robot by the power of thought

Superdoodles: The science of scribbling

Far from being a distraction, doodling has an important purpose - and you can harness it

2013 Smart Guide: Wave goodbye to the mouse

The Leap, a 3D motion control device set to launch next year, will let you control your computer with touch-free hand and finger movements

Read More..

Measures to be taken to make Sengkang junction safer

SINGAPORE: The authorities will put in place several measures in the next two months to make the junction at Sengkang East Way and Sengkang East Drive safer for motorists, cyclists and residents.

Caretaker Member of Parliament (MP) for Punggol East Single Member Constituency (SMC), Mr Teo Ser Luck, said he has discussed the measures with the Traffic Police and Land Transport Authority.

Mr Teo, who is covering the ward vacated by former MP Michael Palmer, told reporters on Sunday morning that the measures aim to control the speed limits of vehicles.

There will be warning signs to inform motorists of the "speed check area".

Enforcement of the speed checks will be stepped up.

The pedestrian crossing will have a timer for pedestrians know how much time they will have to cross the road.

A red light camera will be installed at the junction, but this will take some time to complete.

Mr Teo said over the past few months, accidents in the area have been declining due to traffic police enforcement.

Mr Teo, who is also a MP for Pasir Ris-Punggol Group Representation Constituency and Minister of State for Trade and Industry, was also asked on other developments in Punggol East, amid the interest shown by several opposition parties to contest if and when a by-election is called.

He said the decision by several opposition parties to stake their interest would only give residents more choices.

At the end of the day, he said it is all about serving the residents effectively and serving them well.

When asked if he would be fielded as a candidate in Punggol East by the People's Action Party, Mr Teo replied that he is the representative for Punggol Central, a division under the Pasir Ris-Punggol GRC and should serve his constituents.

At the same time, he has been tasked to cover Punggol East.

Mr Teo said since he started looking after the ward, he has been receiving several emails from Punggol East residents concerning municipal issues, neighbourhood and cleanliness matters, as well as the success rate of flat applications.

Mr Teo will conduct formal meet-the-people sessions in Punggol East from January 8.

- CNA/xq

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'Fiscal Cliff' countdown: Two more days

STORY HIGHLIGHTS

• Last minute negotiations are underway in Congress to avoid a ''fiscal cliff''


• Without a deal, an end of the year deadline triggers takes hikes and cuts in spending


• President Barack Obama is calling for a House and Senate vote, if negotiations fail


• "We'll let you know as soon as we have some news to make," the Senate minority leader says

As the fiscal cliff looms, what's your New Year's message to Washington? Go to CNNiReport to share your video.

Washington (CNN) -- The Senate's top Democrat and Republican were working Sunday to forge a last minute compromise to stop the U.S. economy from going over a "fiscal cliff" that would trigger large tax increases and sweeping spending cuts in the new year.

At stake in the negotiations, according to a number of economists, is the fate of a still fragile U.S. economy that could be pushed back into a recession by the broad tax hikes and automatic $110 billion cuts to domestic and military spending spelled out by the "fiscal cliff" legislation.

Aides for Senate Majority Leader Harry Reid, D-Nevada, and Minority Leader Mitch McConnell, R-Kentucky, said no details on the negotiations were expected until at least early afternoon when the Senate convenes a session at 1 p.m. ET.

"We've been trading paper all day, and the talks continue into the evening," McConnell told reporters Saturday night. "We've been in discussions all day. We'll let you know as soon as we have some news to make."

Even so, it was unknown if Reid and McConnell could come up with a deal that would be acceptable to House Republicans, who refused just before Christmas to take up a compromise bill because it raised taxes and had no chance of passing the Senate.

President Barack Obama was widely expected during his scheduled appearance Sunday on NBC's "Meet the Press" to call for an immediate vote by Congress on a scaled back plan that would only extend middle class tax breaks and unemployment benefits, if the congressional negotiations fail.

The president's appearance on a political talk show is his first in three years, and clearly appears timed to put pressure on lawmakers to get a deal done or take a vote.

The principal dispute continues to be over taxes, specifically over Democrats' demand to extend tax cuts passed under President George W. Bush for families making less than $250,000 a year, while raising the rates on those making more than that.

The expectation is Republicans will try to raise that income threshold to $400,000 and push to keep estate taxes low; Democrats have said they might be open to one such scenario, but not both.

Obama and Democrats have leverage, based on the president's re-election last month and Democrats' gains in the House and Senate in the new Congress. In addition, polls consistently show majority support for Obama's position on taxes, and Democrats insist the House would pass the president's plan with Democrats joined by some Republicans if House Speaker John Boehner, R-Ohio, allowed a vote on it.

"We're now at a point where, in just a couple of days, the law says that every American's tax rates are going up. Every American's paycheck will get a lot smaller, and that would be the wrong thing for our economy," the president said in his weekly address broadcast Saturday.

On Friday, following a meeting with congressional leaders and top administration officials, Obama said he was "modestly optimistic" the Senate leaders would reach an agreement. At the same time, he conceded, "Nobody's going to get 100% of what they want."

However, conservative activist Grover Norquist has vowed to back primary challenges against Republicans who violate his widely signed pledge not to raise taxes. Even if a deal is reached, Norquist has predicted yet more budget showdowns every time the government needs additional money to operate.

The House will reconvene Sunday, and the chamber's Republicans will get together sometime early Sunday night, according to a note sent Saturday to legislators and staffers.

Republicans have opposed any increase in tax rates, and Boehner suffered a political setback by offering a compromise -- a $1 million threshold for the higher rates to kick in -- that his GOP House colleagues refused to support.

The saga has fueled disdain for politicians by many Americans. Such contempt is deserved, said Rep. Steven LaTourette, an Ohio Republican, who is retiring from Congress.

"I think America should be embarrassed by its leadership in D.C.," he told CNN on Friday. "The fact that we have been unable to do things, and instead worried about our next elections. ... I think it's sinful."

CNN's Jessica Yellin, Tom Cohen, Dana Bash, Deirdre Walsh, Lisa Desjardins and Kevin Liptak contributed to this report.

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