Glimmer of hope in last minute fiscal cliff talks

“We had a constructive meeting today,” Obama said. The president said Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky., will continue to hammer out a plan that lawmakers hope will appease both parties. But “if an agreement isn’t reached in time," Obama said, he will urge Reid to bring a plan to a vote in the Senate, placing the ball in the House Republicans’ court.

McConnell and Reid confirmed to reporters that there had been progress, though Reid noted that any deal reached by the end of the year would be “imperfect.” McConnell said that he was "hopeful and optimistic" that they could reach a deal by Sunday.

Pundits speculate that a tax bargain will center on a number floated by Democrats just a few weeks ago - $400,000. That may become the ceiling for an extension of the Bush-era tax cuts, so those earning more than that annually would have a higher tax rate. It would be a begrudging compromise between the $250,000 Obama wanted and the $1 million asked for by House Speaker John Boehner, R-Ohio. The White House, however, has insisted that Obama is sticking with his original $250,000 offer.

If Congress cannot strike a deal before Jan. 1, an automatic $110 billion spending cut and $536 billion tax increase may affect nearly all Americans and could threaten to gradually sink the country back into recession.

Talks between Obama and House and Senate leaders will continue through Saturday and Sunday. The House and the Senate are set to reconvene on Sunday.

Many rural and agriculture leaders had hoped that a farm bill might be lumped in with a larger fiscal cliff deal, though prospects of a permanent solution are looking grim now, just three days before 2013.

An extension would prevent the country from reverting to 1949 farming laws. Most notably, milk pricing may suddenly rely on parity, and possibly jump prices to as high as $8 a gallon.

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