“I believe the probability is we’re going over the cliff and I think that would be horrible,” President Clinton’s Chief of Staff Erskine Bowles said at a Christian Science Monitor breakfast meeting yesterday. “It would be insane to breach this fiscal cliff, yet I think there is only a one-third possibility we’ll actually get something done before December 31.”

As gloomy as Bowles prediction sounds, it is, if anything, optimistic, if the latest reporting from Politico on the state of the negotiations between Speaker John Boehner, R-Ohio, and President Obama is to be believed.

According to Politico, Boehner is willing to sign off on as much as $1.2 trillion in tax hikes over the next ten years in exchange for as little as $400 billion in Medicare cuts that do not even begin to take effect until 2013. That’s right: Boehner is about to sign off on a deal of $3 dollars in tax hikes now in exchange for $1 dollar in spending cuts 10 years from now. There is no way House Republicans will sacrifice their political careers for such a “grand bargain.”

“Cut through the fog, and here’s what to expect: Taxes will go up just shy of $1.2 trillion — the middle ground of what President Barack Obama wants and what Republicans say they could stomach,” Politico reports. “Democrats want most Medicare and other entitlement savings to kick in between 10 and 20 years from now, which will make some Republicans choke. … But that will likely be the deal Republicans will be staring at: tax hikes now in exchange for Medicare changes way later.”

That deal would be far, far worse than just giving into Obama on the top rates for high income earners. If the House were to pass a bill preserving the Bush-rates for 98 percent of Americans, by letting the top rates return to Clinton era levels, that would only raise $824 billion over ten years. Plus the sequestration cuts would still be good law, forcing $1.2 trillion in spending cuts now, including $123 billion in Medicare cuts alone.

In other words, if Boehner does nothing but give in to Obama on the Bush tax rates for the wealthy, taxes will only go up by by $824 billion over the next decade while spending will decrease by $1.2 trillion. But under the deal Boehner is pushing, taxes would go up $1.2 trillion now and we’d only get $400 billion in spending cuts ten years from now. That’s going backwards.

Hopefully Politico is wrong. Hopefully, Boehner is not seriously considering asking Republicans to vote for $1.2 trillion in tax hikes now in exchange for $400 billion in Medicare cuts a decade from now. But if that is currently the state of negotiations, than Bowles is right: we are going over the cliff.

From The Washington Examiner
Examiner Editorial: Obamacare’s stumbles pose political risks for Dems
Tim Carney: The ‘anti-business’ knock on Ken Cuccinelli
David Freddoso: Bill Bolling’s statement categorically ruled out an indy bid for Va. governor
Paul Bedard: 2/3rds chance of going over fiscal cliff
Susan Ferrechio: House Republicans testing support for tax increase
Brian Hughes: Obama enlists public, businesses in fight for tax cuts

In Other News
The Wall Street Journal, Fed Stimulus Likely in 2013: Three months after launching an aggressive push to restart the lumbering U.S. economy, Federal Reserve officials are nearing a decision to continue those efforts into 2013 as the U.S. faces threats from the fiscal cliff at home and fragile economies elsewhere in the world.
The New York Times, U.S. Weighs Bolder Effort to Intervene in Syria’s Conflict: The Obama administration, hoping that the conflict in Syria has reached a turning point, is considering deeper intervention to help push President Bashar al-Assad from power, according to government officials involved in the discussions.
The Washington Post, Mortgage-interest deduction could be on the table in ‘fiscal cliff’ debate: As Congress and the White House negotiate the first major rewrite of tax laws in decades, changing the generations-old mortgage-interest deduction — which costs the government roughly $100 billion a year — has gone from far-off possibility to part of the conversation.
The Los Angeles Times, Union walkout cripples ports of Los Angeles and Long Beach: A small union of maritime clerks managed to shut down most of the nation’s busiest seaport complex Wednesday, raising concerns about harm to the fragile economy.
The Los Angeles Times, California school districts face huge debt on risky bonds: Two hundred school districts across California have borrowed billions of dollars using a costly and risky form of financing that has saddled them with staggering debt, according to a Times analysis.
The Cable, Chuck Hagel being vetted for national security post: Former Nebraska Republican Senator Chuck Hagel is being vetted for a possible top national security post in the Obama administration. Hagel, who co-chairs President Barack Obama’s Intelligence Advisory Board, which provides independent advice on the effectiveness of the intelligence community, could be in contention for either secretary of state or secretary of defense.

Righty Playbook
Keith Hennessey says the President is bluffing on the fiscal cliff.
Timothy Dalrymple asks, “Is it Time for Evangelicals to Stop Opposing Gay Marriage?”
Walter Russell Mead responds to The New York Times claims that California is coming back.

Lefty Playbook
The Washington Post‘s Suzy Khimm identifies higher Medicare premiums as the only entitlement cut Democrats are willing to make.
Think Progress claims extending unemployment benefits would create 300,000 jobs next year.
Nate Cohn thinks Jay Rockefeller is in Big Trouble in West Virginia — and So Are the Dems.