It’s always been doubtful that the White House and Congressional Republicans would reach a quick agreement to head off the end-of-the-year “fiscal cliff” — and as of Friday it looks even less likely. …
Among the reasons:
— There’s no real incentive for the parties to reach an agreement now. Markets may want an early settlement, but, as mentioned, the fiscal doesn’t start until Jan. 1 — more than four weeks way, a near-eternity in politics. Even after New Year’s Day, elements of the fiscal cliff phase in gradually, and a new Congress could always pass legislation retroactive to the start of the year.
— Negotiators will try to add things to the basic debt reduction agreement. Democrats and Republicans have signaled they want additional issues addressed as part of a fiscal cliff agreement; they will take the time to push these issues, and hope the pressure of the deadline will force the other party to agree.