The New York Times reports that a group of Senators are quietly angling for a deal to avert mandatory government spending cuts in January, but liberal economic cheerleader Paul Krugman already sees the negotiation as an inevitable Democratic surrender.
The story so far is that a small bipartisan group in the Senate is crafting a three-point plan to avoid the "fiscal cliff" of automatic spending cuts and tax increases that will kick in on January 1 if no new budget alternative is passed. First, they'd agree to reduce the deficit by $4 trillion over the next 10 years. Then they'd assign the relevant committees to work out the details by re-writing the tax code, changing Social Security and Medicare, and slashing defense and other programs. Then they would have to pass a bill that cancels the sequestration, but trades it for a significant "good faith" reduction in the deficit.
The idea seems reasonable—everyone love bipartisanship—but there are just two minor problems with it. Republicans in the House of Representatives, who are not part of the talks and are not interested in raising taxes, ever, and the election, which could still change the make up of the Senate dramatically. There's no deal until after November and there's no way to know exactly what kind of deal can be had until we know who wins.