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First Thoughts: On the verge of a deal

House Speaker John Boehner walks to his office in the Capitol after meeting with President Barack Obama at the White House December 17, 2012.
House Speaker John Boehner walks to his office in the Capitol after meeting with President Barack Obama at the White House December 17, 2012.Joshua Roberts / Reuters

On the verge of a fiscal-cliff deal… Where things currently stand between Obama and Boehner… The two remaining questions: Can they resolve the final differences? And can they sell the deal to their rank-and-file members?... Liberal and conservative opinion leaders react… The sound of silence (from the right) in the post-Newtown gun debate… Sen. Inouye passes away… And the best news of the day: NBC’s Richard Engel and crew rescued.

*** On the verge of the deal: The Obama White House and House Speaker John Boehner now appear closer to a deal than ever before. The only questions remaining are whether both sides can resolve their remaining differences and, more importantly, can sell the deal to their respective rank-and-files. After Boehner made an offer on Friday to raise rates on income above $1 million, President Obama yesterday presented the speaker with a counterproposal consisting of $1.2 trillion in revenue (which includes the Bush-era tax cuts expiring for income above $400,000) and $1.2 trillion in spending cuts (including $800 billion in health and non-health programs, $290 billion in interest, and $130 billion in changing the cost-of-living adjustment for Social Security benefits). The White House’s offer also extends unemployment insurance, raises the debt ceiling for two years, and includes funds for infrastructure. Boehner’s office released a statement calling the White House’s counteroffer “a step in the right direction,” per NBC’s Frank Thorp. But it doesn’t want to count the interest as part of the spending cuts. Yet he fact the White House is agreeing to the Boehner principle of 1-to-1 revenue increases vs. spending cuts on this deal means it’s now about exchanging numbers, potentially dotting “I”s and crossing “T”s. Folks, this is progress -- but we’re not there yet.

*** So here are where things stand: Both sides are $200 billion apart on tax revenue ($1.2 trillion vs. $1 trillion), apart on the income cut-off for tax rates going up ($400K vs. $1 million), apart on whether you include interest as part of the spending cuts (Republicans believe the White House has actually only proposed a net of approximately $850 billion in spending cuts compared to $1.2 trillion in tax hikes), and apart on the debt-ceiling increase (one year vs. two years). If you simply split the difference, you could have a final deal of $1.1 trillion in revenue, $1.1 trillion in spending cuts, and $600K to $700K on the income cut-off. The things to watch today: 1) How both sides’ rank-and-file members receive these numbers, and 2) if the momentum for a deal continues. As one Dem congressional aide tells First Read, “Momentum breeds momentum.” A Senate leadership aide adds that the potential “Plan B”s circulating among GOPers are being held off until Thursday. So Boehner and the White House have until then, realistically. So time is now of the essence. If you want to do something before Dec. 31, the clock is ticking. By the way, House GOP leaders (Boehner, Eric Cantor, Kevin McCarthy, Cathy McMorris Rodgers, Lynn Jenkins) are holding a stakeout at 10:00 am ET.

*** Liberals and conservatives react: How are liberal and conservative opinion leaders reacting so far to these outlines? From the liberal side, here is the headline banner of today’s Huffington Post: “Raw Deal: Obama’s latest fiscal cliff offer targets middle class, elderly.” From the story: “Obama's offer would allow the payroll tax holiday to expire, meaning middle class workers will see smaller paychecks in 2013.” (Though wasn’t the payroll tax cut supposed to be temporary?) Meanwhile, the New York Times’ Paul Krugman is taking a wait-and-see approach. “Those cuts [CPI adjustment for Social Security] are a very bad thing, although there will supposedly be some protection for low-income seniors. But the cuts are not nearly as bad as raising the Medicare age.” And yesterday, on the conservative side, we saw Heritage Action blast Boehner’s offer to let the Bush-era tax cuts expire on income over $1 million, and Club for Growth urge Republicans not to concede on the debt ceiling. The way you used to be able to get a deal in Washington is if both sides complained -- that meant there was equal pain. The question is if that still applies today.

*** Sound of silence: As’s Mike O’Brien writes, there were two striking developments yesterday in the wake of the Newtown shootings. One, Democratic politicians from red or purple states (Joe Manchin, Harry Reid, Mark Warner, John Yarmuth, Jeanne Shaheen) were calling for having a conversation about guns and their role in the tragedy. And two, Republican politicos have been mostly silent when it comes to guns and the role they played in Connecticut. The New York Times notes how the NRA has been silent, too. “Leaders of the organization have declined interview requests since the shootings, the group’s Twitter account has gone silent, and it has deactivated its Facebook page.”

*** Sen. Inouye passes away: The Washington Post: “Sen. Daniel K. Inouye of Hawaii, a highly decorated World War II combat veteran who used his status as one of the most powerful Democrats in Washington and the second-longest-serving senator in history to send billions of dollars to his home islands, died Monday at Walter Reed National Military Medical Center in Bethesda. He was 88… Since 2010, Sen. Inouye had been the Senate’s president pro tempore, which put him third in the line of succession for the presidency.” A couple of additional points to make here: One, with Inouye’s passing and Sen. Akaka’s upcoming retirement, the next Senate will feature just one remaining WWII veteran: Sen. Frank Lautenberg (who served in Army Signal Corps). Two, the new pro tempore will be Sen. Pat Leahy (who was elected in 1974). And consider this: If he weren’t VP, Joe Biden would have been the pro tempore (he was elected in 1972). By the way, the Honolulu Star-Advertiser reports that Inouye urged Dem Gov. Neil Abercrombie to appoint U.S. Rep. Colleen Hanabusa as Inouye’s successor in the Senate.

*** Engel and crew rescued: And here is our favorite news of the day -- our NBC colleague Richard Engel and his crew have been rescued from Syria. The statement from NBC News: "After being kidnapped and held for five days inside Syria by an unknown group, NBC News Chief Foreign Correspondent Richard Engel and his production crew members have been freed unharmed. We are pleased to report they are safely out of the country." That’s great news for our colleagues, their families, and NBC News. To hear Richard tell about their escape, click here.

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