0 >> we all have our ideas and in the senate, you're right. we probably another 40, 50, 60 of saying that we're ready to both raise revenues and control entitlements. when's the missing ingredient? it is presidential leadership. >> i think in the end we'll get a deal. the question is the timing. >> am hopeful there will be a deal that avoids the worst parts of the fiscal cliff, namely taxes going up on middle class people. >> it's pretty apparent that we are not going to do what we've been called to do. this is 112th congress. we have had two years to deal with quote the fiscal cliff. >> let's bring in our man at the white house, peter alexander standing by. pete, we just got word the president it appears is making some sort of smaller offer at this 3:00 meeting. any idea what smaller might mean? >> reporter: it's a good question, craig. actually kelly o'donnell reporting some more of this from the hill. she says that income level of $400,000 that the president had more recently offered as the place beneath which he wanted to make sure there was an extension of the bush era tax cuts according to kelly not a part of this plan. democrats say that offer for the president which represented a compromise that we had heard about last week as part of a bigger proposal is not a part of the plan to be discussed behind closed doors. only a short time from now. the real question is where that number will be. not the $250,000 you presumed that republicans balked at long ago. perhaps closer to $500,000. given the fact that house speaker john boehner couldn't get his own conference to pass tax cuts for those making less than $1 million, it seems like it's still a tough drag for all those behind closed doors a short time from now. we saw the vice president joe biden arriving here in the white house within the last ten amongst themselves. but the white house, craig, throughout has effectively stuck to its guns and said they believe if mitch mcconnell allowed a vote in the senate and john boehner allowed one in the house that they would be able to get the initial plan passed. >> peter, thanks. we know everyone's taxes are going up if congress fails to reach a deal. here's the breakdown here. incomes under $20,000 will get hit with a $400 tax hike. between $20,000 and $40,000, more than 1,200 more. $40,000 of $65,000, $1,900 and between $65,000 and $108,000, expect to pay $3,500 more in taxes and anything above that, uncle sam's going to take more than $14,000. joining me to talk about this, congressman yarmuth of kentucky. you are due back in washington sunday we're told. what will you tell your constituents if they're subject to those tax hikes that i just showed? >> well, i'm going to tell them what i've been saying and that is that unfortunately we have a republican majority in the house that doesn't believe in raising taxes on anyone, no matter how well think they may be. and really, is not interested in a balanced approach to deficit reduction. it's been pretty clear that that's the story we have been telling and it happens to be the truth. >> i understand that two of colleagues proposed cuts to medicare for a hike in the debt ceiling. what do you make of that offer? >> i think one of the things that people don't realize is that it's a dirty little secret. the republicans don't want to cut the things that americans want cut. and they want to cut things that americans don't want cut. poll after poll shown americans do not want deficit reduction done by cutting medicare and medicare and social security. so they propose and saw the same scenario when paul ryan put the budget out and because the american people rejected the kind of draconian cuts that the republicans want to make so, you know, that's a nonstarter in the senate. i think it's a nonstarter with the president. sure can pass the house but going nowhere past that. >> the smaller offer we hear that the president is making at 3:00, to congressional leadership, what kind of offer would you like to see the president make? >> well, there was some rumblings i think an hour ago that there was a -- something brewing i think in the senate that had a $400,000 threshold, that was i think a ten-year duration and also dealt with unemployment benefits and kept republicans to go along with the democratic minority and create a majority to pass something like the plan i talked about. that's the only way it happens before january 1st. >> kentucky congressman john r yarmouth, safe travels. >> and now our guests. gentlemen, good afternoon to both of you. leaders right now, right now, michael sheer, we understand, preparing to meet behind closed doors at the white house. some optimistic. many are not. how do you feel about this quote smaller deal that the president is set to offer? >> well, so far, you know, as peter alexander said, we don't know the contours of what they will discuss. there's reports earlier in the afternoon that it would have the $400,000 threshold. the white house has denied that that's what's on the table and i think some reporting suggest maybe it's not. you know, i think what they're trying to do, they have all recognized that a big grand compromise is not going to be reached before the fiscal cliff deadline and trying to figure out some way this they can skip passed that deadline without the consequences kicking in. >> there's a narrative that's beginning to take hold that folks prefer to see -- in both parties, prefer to see us go off the so-called fiscal cliff. nate silver in "the new york times" and putting up a quote here, this is just an excerpt. most members of the house now come from hyper partisan districts with no threat of losing to the other party. vice president of the heritage foundation telling the national journal, quote, when everybody goes back home, i don't think they're feeling the heat from their constituents for failing to reach an agreement. if anything, hearing the opposite. this is vice president of the heritage foundation. is there an incentive for house republicans to compromise or senate republicans? is there an incentive for the gop? >> no political incentive for this and now seeing it. there's a lot of hype and seeing the end game here and if you're not angry, you are not paying attention. i spoke to a senator saying there could be a small deal. mr. shear is shorting to the similar thing and the bottom line is this was built on a threat for the debt ceiling 514 days ago and the idea was we're going to have automatic cuts that hurt americans so much we'll have to cut a deal. they said that openly. i'm not paraphrasing. that's not rhetoric. here we are. okay? it's the end of the week. we're going in to new year's and what do we have? bob corker got up today, senator, republican, senior guy now on this issue. and what does he say? we may not get a deal and we're going to threaten the good faith and credit of the united states again. okay? 514 days and what do we get? more debt ceiling threats and the irony is you talk about the pressure but the irony is republican base on wall street thinks that's a terrible idea. so what does the president have to do? something that's uncomfortable for him because he's more responsible than these guys and say i care so much about a deal to negotiate with myself. i'm going to give it up and still threatening me and i think he has to take an maxim from donald rumsfeld, weakness is provocative. tell them we're strong, the white house, we were re-elected. you go home. you go home and deal with it because this is out of control and nobody's angry enough to realize it. >> you're angry enough. >> i'm alone. >> no, you're not. >> michael shear's not angry. he's measured and i understand that and we're playing different roles sometimes but if you're a reporter and following this and following this for a year or two, some point you have to say this is insanity and the threat to the economy is not a reasonable way to govern. >> mike, how -- again, not to oversimplify this thing, but how did we get here? i think most folks following this fairly closely assumed that as is the case with a lot of things in washington, d.c. that at the 11th hour withere will ba deal that gets done. there are a lot of folks involved in the deal making saying, it won't happen this time. >> well, look. i think ari is right in one real respect which is they set this up, you know, more than a year ago as a way of trying to provide counter pressure to the political pressures that exist across the board on all of these lawmakers and these individual districts. they thought that the pressure, the scare tactic that they put on themselves of deep defense cuts on the one side and deep cuts to domestic programs on the other side forces everybody to the table. it clearly turned out that in the wake of the election we had, the pressures in their districts, the threat of being primaried especially on the republican side meant that folks aren't willing to move as quickly and put themselves in this bind. i've talked to a senator just earlier today saying that the real fear is psychological impact. go over the cliff, deal with some of the technical problems of some of the tax issues, but still be left with a lack of confidence on the part of consumers and business and investors and really the threat that they worry about. >> can i make another point. michael is saying from a nonpartisan perspective this kind of threat in the governing process isn't working. and i'm saying from a more ideological perspective, it's bad and irresponsible to take people that make them a bargaining chip. i think the white house should say we take this sequestration cuts off the -- >> no cuts at snaul. >> but we agree there's things to be done. i have to be realistic and replace wit a new counter incentive. we have, congressional and white house and presidential salary, for each day we don't get it done. cut it in half and again and come up with something that puts the pressure where it should be which is on the politicians, not on everybody else. you go to parties and people watch the ball drop and wonder why we have a self-inflicted economic crisis. self inflicted. not from the markets but from the congress. >> that sounds great but i think you and i both know that's not politically feasible talking about something that's politically feasible over three to four days, what are we looking at here, michael? what at this point has the greatest chance of getting through both houses of congress? >> i mean, i think it's really hard, the people i have talked to suggest it's very hard to see what gets through. i think the closest that people get to some kind of agreement is this idea that peter alexander talked about. is there a way that john boehner finally concludes to have some smaller subset of republicans in the house combined with democrats in the house and push something through? i have to tell you that, you know, the political pressures on the other side and the pressure on john boehner to be the republican speaker is really intense. you know, the folks i talked to don't think that there's a high probability that that happens. >> always a pleasure. michael, ari. >> thank you for having me. >> i love it when you get fired up v. a good weekend. problem averted? dock workers that were threatening to strike and shut down ports tomorrow come to a temporary deal but could the country be facing the same problem in 30 days? we'll talk about that. plus, severe weather could be on the way to the east coast as parts of the country continue to recover from storms that crippled communities already. who may be affected this weekend? plus -- >> from father to father, president, i just ask that as a father just to consider what's happening to the families that are in process. >> couples hoping, praying to adopt russian orphans and pleading with russian president vladimir putin after he signs a law banning americans from adopting russians. one advocate said they're small change in a game between two states. as always, join our conversation on twitter. you can find us.