Year and a great 2013. My colleague wolf blitzer and the situation room up now. Deb, thanks very much. Happening now how we solve this thing, then theyve got another thing coming. Thats not the way a president should lead. This is, these are draconian effects. A fever pitch here in washington with only eight hours left before the country tumbles over that socalled fiscal cliff. Were live with the very latest. Also, cries of outrage from americans across the country. What the impasse means for Small Business owners, and whos to blame. And a blood clot lands Hillary Clinton in the hospital this new years eve. Our dr. Gupta tells us just how serious this condition could be. We want to welcome viewers from the United States and around the world. Im wolf blitzer. Youre in the situation room. Were now less than eight hours away from what could be a dire moment for the United States economy, if president obama and the congress cant agree on a deal to keep the country from plunging over that fiscal cliff. Heres what both sides are considering in a potential deal right now. An increase in tax rates for families making over 450,000 a year. Extending unemployment benefits. And an increase in the estate tax. The president seemed hopeful but cautious when he addressed the American People earlier today. Today, it appears that an agreement to prevent this new years tax hike is within sight. But its not done. There are still issues left to resolve. But were hopeful that congress can get it done. But its not done. Lets get straight to our chief White House CorrespondentJessi Jessica yellin. Shes over at the white house with the very latest. The president seems pretty optimistic that its within a few hours we could have a deal, right . Reporter wolf, the people i just spoke to here say they are no more or less optimistic than they were this morning. Which is to say they are not cueing the confetti just yet. Senator Mitch Mcconnell, the republican leader on the hill, is still talking to the white house. The white house is in Constant Contact with the democratic leader harry reid. And theyre working towards some kind of an agreement. But the white house has all along had during these past few days, been somewhat hopeful that they could reach some kind of agreement in the senate. All along, they have been far less optimistic that there would be an agreement that can get through the house. Only because from the white houses perspective, from democrats perspective broadly, theyve been let down time and again by speaker boehner. Theyve never been able to reach a deal with speaker boehner. And now with this news that the house is going to be breaking for the evening, it does look like that might happen again. Now, theres one reason, wolf, why they are filling this package with measures that could appeal to democrats, not just, as you mentioned, increasing, letting taxes for the highest income earners go to clinton rates. Also extending unemployment benefits. But also it includes tuition credits and tax credits for kids because these are designed to woo democratic votes. They need as Many Democrats to support this as possible. They need a combination of 218 in the house of representatives. That vote is not going to happen, clearly, today. As you know, jessica, the president now facing some criticism over the remarks he made over at the white house earlier in the day. Walk us through what the political calculations were in his decision to go out and do that speaking event earlier in the day. Reporter well, it was a twopronged effort, right. On one hand, an effort to push democrats to get on board. He was surrounded by a socalled regular americans who would see their taxes go up if there is no deal. And he made the case to democrats that and to the broad congress but mostly his own party that this is filled with measures that would appeal to their own voters, and they could live to fight the right of their priorities that are in this package another day. Then there was a lot of red meat in his speech. At one point, he said some words that are getting now some attention, some criticism from republicans who thought it was quite partisan. He accused republicans of trying to, quote, shove spending cuts down well, shove spending at us. A bit of a dig. And so this is a part of it would seem a pr effort to wage blame lay blame on the republicans in case this fails. The president trying to get as much distance from this and laying this as a congressional effort, not a white house effort, but a congressional effort, again, in case this fails before and we go over the cliff, wolf. Over at the white house, do you have any idea when the senate might be taking up this, have a roll call on whatever deal might be emerging . Reporter i dont, but i have a feeling we should try checking in with dana bash. She will have the first word on that. Lets go to dana bash right now. First of all, the reaction to the president s remarks. We heard some biting criticism that the president was inappropriate in saying what he said at this sensitive moment. Reporter thats right. Ill get to that in one second. To answer your question, we dont know yet about the senate, but we do have a little bit of news that jessica alluded to, and that is the house will break tonight. We reported earlier this is likely. Now its official. The house will break tonight, new years eve, december 31st, the night of the fiscal cliff, without voting on the fiscal cliff package. Theyre going to likely come in, if theres something to vote on tomorrow, and vote on it then. This is a procedural reason because they just dont have anything to vote on. Its also politically advantageous because House Republicans and democrats are now going to be able to vote on effectively a tax cut, not a tax increase, because taxes go up january 1st. I think the best way to answer is by telling you what Mitch Mcdonnell did, the Senate Republican leader, the point person with the Vice President in the past 24 hours in these negotiations. He said, we are so close on almost everything that we should just hold a vote right now. He believes theyre there. They have a deal on most of the all of the tax issues and most other issues except for one outstanding issue, and that is the sequester, those mandatory spending cuts, how to delay those and in what timetable and in what fashion. Democrats simply havent we havent heard from harry reid yet but privately democrats are saying were not ready to do that yet because we still dont think we have a deal. Mitch mcconnell trying to push things along by saying that publicly, hes fine with voting on all of the things they have agreed on right now. Dana, lets get back to this procedural issue. The vote in the house presumably tomorrow, but that only follows a vote in the senate. That vote in the senate has to take place, correct me if im wrong, between now and midnight, is that right . Reporter if we dont officially go off the fiscal cliff, yes, thats correct. If it happens after midnight, then officially, everybodys taxes will go up. The realworld effect wont happen quite yet because people wont get their paychecks on january 1st. I mean, things take a couple of days to actually happen practically. And the senate very well could come in tomorrow on a federal holiday, on january 1st, when the markets are not in session, markets arent operating, so theres nobody to be spooked by Congress Failing to do this. But were sort of not there yet. We are still eight hours away. According to some sources i just talked to before coming on to you, legislatively, they feel they could probably get this stuff written. Most of it is written already. They can put it together pretty fast and get it on the floor for a vote. So the next few hours are absolutely critical to figuring out if that is going to happen. But its fair to say, dana, and i want to be precise, that the United States is now going to go over the fiscal cliff because the house of representatives will adjourn and they will not consider anything that the Senate Might Pass tonight. So we are going over the fiscal cliff, isnt that right . Reporter technically, thats absolutely right, youre right. Because to not go over the cliff, both houses of congress will have to pass something to avert that, and the president will have to sign it. So that is true. And that is why, as i said, politically, there arent a lot of there are some people who arent that upset about it, because it kind of makes the medicine go down a little bit easier when they vote on these cuts. Having said that, weve heard from democrats in particular, for weeks now, that, you know, to sort of take a deep breath, that yes, it is called the fiscal cliff, but it is more of a slope, and particularly advantageous to members of congress who havent got be their work done that january 1st is a federal holiday. So nothing is going to happen and there arent going to be any realworld effects, especially when were talking about the thing that really matters the most to a lot of people around here, just how the market is reacting. We saw the market go up today at news, seemingly at news that things were going well here. So, but technically, i think youre right, i think if the house doesnt vote tonight, which we know they will not, technically were going over the cliff. Very quickly, that 72hour rule in the house, i believe theres a rule, that they have to have 72 hours to read legislation before they vote. Are they going to waive that rule . Reporter what do they say about rules . Theyre made to be broken, wolf. I think thats safe to say. They would waive that rule, yes. All right, dana, stand by. We have two guests joining us right now. Two key senators, republican senators john mccain of arizona and Lindsey Graham of south carolina. Senators, thanks to both of you for coming in. Lets go to both of you, senator mccain first. I know you were angry at the tone of the president s comments today, but give us your sense. Are you going to vote for this legislation, assuming theres a deal . If theres a deal, obviously. If it does not have at least a delay in implementation of sequestration, which the secretary of defense has said will be devastating to national security, then i probably cannot vote for that, unless thats included in the deal. If its a two or threemonth delay, sequestration going into effect, in other words, those billions of dollars in defense cuts that are supposed to go into effect right away, if its delayed for two or three months, is that good enough to get your vote tonight . I think i would have to see the rest of the package obviously, wolf. I want to support anything that would avert whats going to happen if we dont act. But at the same time, i cant vote for something that i think and i agree with the secretary of defense and the chairman of the joint chiefs of staff that will devastate national security. But i could certainly support a delay in its implementation. But i would have to i would also want there to be a specific date for us acting on sequestration. Senator graham, i know you agree on that specific issue, with senator mccain. But you know we are now technically going over the fiscal cliff. Because the house of representatives is going to adjourn. Theyre not going to consider anything that you guys in the Senate Might Pass. At least until tomorrow. So from your perspective, what does that mean, senator graham, that the country, the United States, is now going over the fiscal cliff . I just think it shows the dysfunction of the political system. Back to the president S Performance today, that was pretty unusual. To have a kind of a pep rally in the middle of negotiations. What john said about defense cuts going into effect, shooting the military in the head, according to secretary panetta, is real and true. But i want to cut 1. 2 trillion over the next decade. Were going to spend 46. 5 trillion. Its not hard to find 1. 2 trillion. I just dont want to destroy the Defense Department. So if you delay the cuts, youre going to lose votes in the house. Youre going to lose votes in the house because people in the house want to cut the government. I want to cut the government. I just dont want to destroy the Defense Department. Do you have any idea, senator mccain, as we speak right now, when the senate will vote on whatever agreement has been reached . Well, i think theres hopes that we, if we vote tonight or tomorrow, i know there are concerns about the sequestration aspect of it. Were also very concerned that theres no spending cuts associated with a tentative deal. But theres no doubt that the president straight talk, wolf. The president has won the election. He does have an advantage here. He has a larger Approval Rating than the congress does. But that doesnt mean that we sacrifice principle. Sequestration to me is a principle. A very important issue. I assume theyre going to work out an arrangement that they will delay that sequestration, those automatic defense cuts, at least for a few months. Presumably that will i assume that will allow you, senator graham, to go ahead and you might not be thrilled with this compromise, but if its 400,000 for individuals, 450,000 for couples, that would be acceptable to you, and let the those people earning more than that a year see their tax rates go from 35 to 39. 6 . Hats off to the president , he won that argument. Bowles simpson eliminated deductions to generate revenue. Raising rates is a solution the president came up with, its not bipartisan, but i would vote for the deal you just described. Back to sequestration. We promised the American People in august when we raise theed the debt ceiling by 2 trillion, we would offset that debt ceiling with a dollar for dollar cut. The 1. 2 trillion, the supercommittees failure to find those cuts, was part of the budget control act deal in august 2011. If we set aside those spending cuts, we broke our promise to the American People to pay for more borrowing. So i think you lose a lot of votes in the house if you dont offset sequestration for at least a couple months, not just delay it. Does it make any go ahead, senator. Wolf, the president , during the campaign and just before sort of sequestration wont happen. He didnt say it might not, he said it wont happen. So i hope hell keep to that pledge in these negotiations. Can i add something . We made about ten different proposals to offset the effects of sequestration on the Defense Department and other areas of the government till march of this coming year, so about 22 billion. They say no to everything. Weve got 3. 5 trillion to choose from, in trying to find an offset for three months. Its ridiculous you cant find an offset for three months. Are you going to use the raising of the debt ceiling in february or march, senator mccain, as leverage to get what you want from the president . I think theres going to be a whole new field of battle when the debt ceiling rolls around. Most of us have pledged that were going to have to before we vote, again, to raise the debt ceiling, even though it may be at great political cost, weve got to address spending, and that means entitlements. Weve got to get us back on a path. Look, we just added 2. 1 trillion in the last increase in the debt ceiling. And Spending Continues to go up. I think theres going to be a pretty big showdown the next time around when we go to the debt limit. There will be another round of fighting to be sure. Lets see what happens over the next 24 hours. Its clear right now since the house is about to adjourn that the u. S. Is going over the fiscal cliff, at least technically. Well see what the senate does tonight, if anything. What the house of representatives does to follow the stakes, as all of us know, are enormous. Senators, thanks very much for joining us. Thank you. Congress had well over a year to tackle this fiscal cliff. 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Were following the breaking news. The United States will, yes, will be going other the fiscal cliff. At least technically. The house of representatives deciding only moments ago that it will not consider any legislation that might be passed by the senate tonight as a result. Fiscal cliff, thats going to be a fact of life. Lets bring in our senior Congressional Correspondent dana bash, once again shes joining us. Tell us the very latest. Because, as you and i have been pointing out, technically at least, were going over the fiscal cliff. Thats right, we are. Since the couple of minutes ago that you and i talked, Senate Republican leader Mitch Mcconnell has called a meeting right down there, im in the house side, over there on the other side of the rotunda is the senate, and not too far away from there is where Senate Republicans are going to meet. We dont know yet whether or not senato