cliff talks with democrats. treasury secretary tim geithner saying and telling chris wallace republicans must accept the tax hikes for the wealthy to reach a deal. a deal is what we are after. peter doocy live in washington with more. peter, tell us first, speaker boehner -- the big problem right now with the white house proposal that was just presented. >> jamie, speaker boehner says he was flabbergasted when the treasury secretary geithner came to capitol hill and told him what the president wants. and this is why. >> the president is asking for $1.6 trillion worth of new revenue in ten years. twice as much as he has been asking for in public. he had stimulus spending in here that exceeded the amount of new cuts he was willing to consider. it was not a serious offer. >> reporter: secretary geithner says the white house $4 trillion plan has 2 to 1 ratio of cuts to spending increases. but everything we heard from speaker boehner suggests the $1.6 trillion in new revenue the white house wants is too much. especially since boehner does not want to increase tax rate at all. he wants the revenue from the closed loopholes and limited deduction. >> put a new deal on the table but tim geithner, does he say specifically where he sees the tax rate for the top earners going? >> he did. 39.6%, like in clinton era. he said clinton rare was time of remarkably good economic growth and strong private investment and he thinks that the republicans just need time to digest the idea of higher rates for rich. >> you heard them for the first time i think in two decades now acknowledge that they are willing to have the revenue go up as part of a balanced plan. a good first step. they have to tell us what they are willing to do on rate and revenues. that is hard for republicans. >> secretary geithner says he cannot promise we will not go off the fiscal cliff. speaker boehner says he is going to do everything we can to avoid the cliff. but acknowledged there is a chance he canal stop it. jamie? >> eric: peter doocy comprehensive report. >> jamie: thank you. >> eric: president obama hit the road on friday to try to sell his plan to the american people. but is that his -- is that what needed to make a deal? bring in max schlapp, political director under president bush. former democratic congressman from texas, martin frost. matt and martin, welcome sunday morning. good to see you. matt, let me start with you. what do they need, because they are not there now, to get to the point they need to make a deal? >> they have time to pull a deal together. the real concern here is that president obama is drawing lines in the sand. some of the lines might not be able to be crossed by the republicans. that gets people increasingly worried that an overall deal can't be reached. hard to imagine in the short-term before cliff by the end of the year, they can't do something to bridge this in to a conversation next year. but when president obama says things through tim geithner that he said about raising tax rate and spend additional money, which is crazy, it makes people more concerned that a big overall grand bargain can't be reached next year. >> eric: martin, do you think a grand bargain won't be reached? >> i think it will. talk about what is going on now here first. you know, the president won the election. he campaigned on the basis of higher rates for the taxpayer income earners. no surprise. the republicans are asking shocked that the president is taking a tough line. i think they expect him to roll over and play dead. that is not the way things work in this town. he won the election. and he told the american people we were going to raise the rates on the top income earners. now that is what he is trying to do. i think there is some give here. i don't think it has to go up to 39.6. right now it's 35. maybe it goes up a point or two. listen, republicans need time to sort through all of this. there will be a short-term agreement. there will be a down payment with some increased taxes. some increased budget cuts. then there will be a framework for next year. i think they will reach a deal next year. i don't think it's easy. but listen, this is all what politics is about. no one gets everything. you have a negotiation. that is what is going on now. negotiation. >> eric: when you say you think there are increaseded taxes or like increased revenues instead of the increased taxes like republicans want? >> here is what is at stake. economy is on the brink potentially of going to recession. that will have the worst impact on the deficit that anything will. we got to make sure that the economy continuebes to grow. that is the problem here. i know democrats have this blood lust to raise taxes on supposedly rich people, which are really small business people. but it is not going to do anything to grow the economy. here is what president obama needs. he has to make sure the economy grows. he will be a two-term jimmy carter if the economy goes back in recession and we can't pull ourselves out of this thing. >> eric: i heard you laugh, martin on the "two-term jimmy carter" line. >> he doesn't want to be a two-term george w. bush that took us in a steep recession. >> hey, you are the one with the bush tax cut. >> this can be worked out. everybody knows that. you can raise rates a point or two, that is not going to be end of the world. republicans understand that. let's get through with the fear we have had a couple of weeks of theater and let's get down to serious negotiations. i don't think the republicans want to fight to the death to protect tax breaks for the wealthy. that is not the message they want to send. they tried it during the election and they lost on that. >> eric: if i just interrupt, matt mentioned small businesses. let me read you this tough edtory from investors business daily this past week. they call it return of the tax-and-spend democrats in d.c. of the president's plan it says turn in a massive $1.6 trillion tax increase, most of which will hit small businesses. $600 billion of which the white house hasn't specified but combined it with the no spending cuts at all swept seen the game before. the democrats always pocket the taxes. forget about the spending. martin, is that a fair characterization? >> no, i don't think it is. i think you can work it out so there are significant cuts. and that there is a little more in taxes. everybody, no one gets everything they want. but there is an arrangement that lets us go forward. i don't think the -- i talk to people in the white house who are close to the president who know his thinking. the president does not want to us go over the cliff. even for a short period of time. he does want something worked out but he is not going to roll over and play dead. he is not going to say the republicans you get everything you want. >> eric: matt, allegedly tax-and-spend democrats? >> yeah. well, they are living up to their moniker. and here is the thing. i love hearing martin frost and president obama going out will an defending the bush tax cut. they criticize president bush on one side. but then they are out there saying that the tax cut by an large are needed to get the economy to grow. for martin frost -- >> i isn't say that. matt, i did not say that. i said -- >> well, hold on for you to say that president obama won the election. remember you sat in the house of representatives for many years and republicans controlled that house. when democrats controlled that house, they flex their muscles. the republicans in the house have a constitutional obligation to make sure we get a fair compromise. speaker boehner wants that. that is what he is fighting for. >> i think the president does, too. and the republicans can't expect that after he was re-elected on the basis that the rich get to pay a little bit more that the president -- >> i didn't mean that. i didn't mean that. >> eric: okay. prediction, end it there. prediction we won't be going over the fiscal cliff. >> i think we will not go over the tis call cliff and it will be worked out by christmas eve. maybe if not before. >> eric: we can't something in our stockings for that. thank you so much. >> thank you. >> eric: jamie? >> jamie: fox news extreme weather alert. folks in california, well, you want to pay attention to this, because you know you have had storms. there are more coming. flood advisories in effect already for some residents. and residents are left to fill sandbags to try and keep water out of their homes. >> i started to think what will i do first? i'll get up an put that on and that on and grab my coat. >> waiting for a disaster to happen. are you waiting for to us flood? >> everybody seen it before if they lived here for a long time. it can happen. listen to what everybody is telling you. be prepared. >> eric: we hope so. >> jamie: they are doing what they can. dominic di-natale streaming live for us from california. what is the situation there? >> reporter: jamie, expecting the petaluma river behind me to flood at some point today, in fact, in the next couple of hours. you can see behind me if the camera man zooms in the swell on the water today safe. it's risen a foot overnight. it will go higher than that. we have had about two inchs of rain in the past three hours or so. about 4:30 this morning when we looked out the windows, there was so much rain coming down. it was bouncing off the river bed. it was the wind whipping it up so much. it appeared like the rain was actually defying gravity and heading back to the sky. we have seen the scenes like that across the region really all night long. expecting at least seven inches of rain to hit the higher elevation. we have had winds up to 60 miles per hour. that is causing problems; particularly, in san francisco, where we saw a one big rig blown over. that was taking up the richmond-san rafael bridge. one person dead in a three-car pileup. we understand it was a combination of both the rain and the wind there. flights delayed at the airport. high winds of 50 miles per hour. the concern is the river napa. no idea of the scale of the flooding. truckee river will get a surge, possibly four feet above the flood level. st. helena we will see there a surge of up to 27 feet. a lot of damage in the area like floods in 2005 in napa1. howe homes were affected. so people have been bracing for that. at the moment, 11,000 homes without power. that could get worse. it depends how bad the floodwaters get. we know as the day continues. back to you. >> jamie: keep us posted. thank you so much. >> eric: israel responding to the successful bid and are withholding $100 million in tax revenue from the palestinians who it turns out haven't paid the electric bill. they owe the power company over $200 million. hoy will it impact the peace process? david lee miller with the latest. hi david lee. >> something worth noting the $100 million owed to palestinians is money that israel collects on their behalf. the tax money and customs fee fees. the money, the palestinians use to pay the salaries as well as cost of security. no doubt, this is going to create economic hardship on the palestinian authority. meanwhile, in the last few hours the palestinian president mahmoud abbas arrived in ramallah from the u.n. vote in new york. he received there a hero's welcome. there were thousands and thousands in the main square outside the government offices. many held up the picture, balloons, the palestinian flag. abbas told the crowd and i quote "palestine achieved historic achievement at the united nations." meanwhile, the palestinians celebrated, israeli settlement construction on the west bank continued today. in response to the u.n. vote, israel said it was planning for additional construction in the same area where the pict the actual work, that could be years away. government gave green light for construction of 3,000 units in east jerusalem and elsewhere on the west bank. weekly cabinet meeting today prime minister benjamin netanyahu dismissed criticism of the settlement construction saying and i quote, "we will carry on building in jerusalem and in all areas on the map of israel strategic interest." if israel proceeds with the settlement plans the palestinians say it is going to make it immaterial possible for them to have -- make it impossible to have a viable state because it's not contiguous on the ground. united states addressed the settlement saying it was counterproductive. >> eric: we'll see what the palestinians do now that they can be more involved in the u.n. agencies and the criminal court, too. good to see you. >> jamie: go to egypt now. another big story with the new developments in that country's ongoing political crisis. egypt highest court now suspending its work out of fear for its member safety. there have been protests on both sides, but their concern is the supports of the islamic president mohammed morsi. the other protesters have taken to the streets to demonstrate against the new president. is the white house doing if you have to respond to the situation? is it even a situation we have to be involved in? stein yates is former deputy assistant for vice president of national security affairs. steven welcome. >> thank you. >> jamie: president morsi presented a new constitution. what does it provide and what concern if any should the u.s. have? >> well, among the key concer concerns is the notion that he is not subject to judicial review. in any normal democratic system where there are checks and balances you would have legislative check and judicial check among others on act of an overact as executive. what we see with mohammed morsi, leader of the muslim brotherhood is after winning a narrow election he is using every tool at his disposal to make generational impact by way of what he says. >> jamie: when i watch the pictures and i see both sides protesting, i wonder to myself so much was sacrificed for what the people there wanted. free society, ability to livepeacefully and pray the way they want. muslim brotherhood growing the way it has. is that a sign of what the middle east will look like? >> clearist sign so far. of what the turbulence of arab spring brought us. with have no way to shape outcome of the political systems but we know if we don't speak clearly about what is important to us and don't take action to bolster those who are secular and democrat nick the outlook to balance forces then these kind of groups like the muslim brotherhood win. >> jamie: i heard about egyptians who had to flee because they were christians and want freedom they thought they were getting. besides monitoring the situation what does the u.s. need to do? is the white house doing what it should? >> the white house seems to be saying that in a democratic system we need to stand at the sideline and respect whatever outcome presents itself. it sounds laudable on the face, except we have major interest in egypt and the broader middle east affected by the outcome. also, if we don't even say that we favor secular forces or taking the evidents to support them and bolster allies to make the same they have a choice to make a deal with the devil they live with. this is a problem we face with other countrys and presents us in pakistan. egypt is moving more in the pakistani model. >> jamie: is it realistic we can intercede bring back civility. or will we see pictures like we see in tahrir square going forward? could there be violence? >> there will be violence and turbulence in the day ahead. we need to show some support for the forces of freedom. there are options that have gone cheaply. we have gone to the other to bolster legitimacy, speaking out on the dole they forged tonga san antonio-hamas situation. we added to the legitimacy and doing it will to add to legitimacy of those who oppose them and we agree more. >> jamie: tense situation. we're following it. thank you for being with us today. >> thank you. anytime. republican sponsored immigration bill that passed the house and may beheaded to the senate but the white house is against it. why? what is it? we have a fair and balanced debate on that straight ahead. >> jamie: also, it happens to the best of us, eric. we open that gift and it's not quite right. but you no reason to worry because in the take charge consume procedure text segment we're going to try to tell you how you can return anything. bending the rules next. ♪ ♪ sometimes what we suffer from is bigger than we think ... like the flu. with aches, fever and chills- the flu's a really big deal. so why treat it like it's a little cold? there's something that works differently than over-the-counter remedies. prescription tamiflu attacks the flu virus at its source. so don't wait. call your doctor right away. tamiflu is prescription medicine for treating the flu in adults and children one year and older whose flu symptoms started within the last two days. before taking tamiflu tell your doctor if you're pregnant, nursing. have serious health conditions, or take other medicines. if you develop an allergic reaction, a severe rash, or signs of unusual behavior, stop taking tamiflu and call your doctor immediately. children and adolescents in particular may be at an increased risk of seizures, confusion or abnormal behavior. the most common side effects are mild to moderate nausea and vomiting. the flu comes on fast, so ask your doctor about tamiflu. prescription for flu. ♪ ♪ >> eric: fox news voter fraud unit now. in troy, new york, shocking testimony at a voter fraud trial there. former county clerk admitting faking absentee ballot to steal election was routine and he called it a game. reports say the democratic political operatives targeted low-income residents, chemotherapy patient but allegedly faking ballots for them because they figured they would not show up and actually vote in the election. we have gotten e-mail on our e-mail site with questions after this past november election. this is from jane in florida -- "after i finished my ballot i was informed the machine was not working and instructed by the election deputy to place it in an emergency box." you can see where the frustration comes in when they said, "we will put it through the counting machine later." my big issue is how do i know my vote even counts? tech neckly they could have done anything with it. well, janie, technically they are not supposed to. a democrat and republican official must supervisor the process. many secretary of state have a spot on the state to check your voting history. local board of elections should tell the same thing. this from a service member who wrote -- i am a military member who voted in the last three le ex-s and had to vote deployment or overseas. why can't we have a voting station at our deployed areas?" justin, the pentagon said they made a big push for that and there is prediction military vote was down last month the final number should be in this coming week. >> north carolina -- "voting is one of the greatest privileges we have in our country and people choose to dishonor the electorate and themselves committing fraud leapt voting. i believe it's my duty to report it." thank you, michael, it's our duty to investigate it. as always, here is our address. [email protected]. we are staying on this beat. >> jamie: those are incredible comments from folks out there. thank you, eric. well, we made it through the height of the holiday shopping season. soon you will get your gift. but sometimes family and friends miss the mark. today i want to give you tips for returning the gifts that weren't quite right. kristen benz is retall analyst of pmv venture group. welcome. >> hi. >> jamie: i manual with the economy the way it is, the rules could be even tighter this year on returns. do you expect that? >> absolutely. especially with a pending fiscal cliff ahead of us you will see a lot of buyer's remors