It seems obvious that there is not time now to negotiate anything but a rudimentary deal that would extend Middle Class tax cuts into next year while putting off spending cuts.

Reuters:

A stop-gap that puts everything off for a while but resolves nothing is now the most promising alternative, if there is to be one, to the across-the-board tax hikes and spending cuts described as a "fiscal cliff" because they threaten to send the U.S. economy plunging into another recession.

It is also the way fiscal showdowns have ended in Washington in recent years.

Such a fix, at best, would delay the spending cuts and tax hikes further into 2013 as well as work to address in a long-term way a government budget that has generated deficits exceeding $1 trillion in each of the last four years. Even worse, it would set up a huge fight in January and February over raising the U.S. debt ceiling, which controls the amount of money the federal government can borrow.

Dysfunction in Washington was specifically cited as one of the reasons rating agency Standard & Poor's cut the U.S. debt rating to AA-plus after a battle over the debt ceiling in 2011. That alone - not to mention going over the cliff - could lead to another rating cut.

At worst, the new year could start with a full-fledged jump off the 'cliff,' with an understanding, communicated to financial markets, that Congress and the White House would come back and try again for a solution.

Given the apparent deadlock, some congressional aides this week said that Washington needed to begin telegraphing to Wall Street that markets should not panic if a "fiscal cliff" deal is not struck in December.

Would Obama sign a temporary reprieve? He may not simply because he realizes that going over the cliff would mean the GOP gets blamed for any economic downturn. What's a little pain for ordinary Americans when he can claim victory later on?

It hardly matters. There is no deal to be reached anyway and Congress has become expert at can kicking. My guess is we will continue this charade of "stop gap" agreements until one side or the other controls Congress.