Updated at 2:15 a.m. ET -- An agreement in principle to avert broad tax increases and spending cuts passed in the Senate early Tuesday morning, with an overwhelming vote of 89-8.

The House of Representatives is expected to vote before Wednesday.

The interim New Year's Eve tax deal negotiated by Biden and Senate Republican Leader Sen. Mitch McConnell of Kentucky would raise income taxes on single earners with annual incomes above $400,000 and married couples with incomes above $450,000.

It also blocks spending cuts for two months, extends unemployment benefits for the long-term jobless, prevents a 27 percent cut in fees for doctors who treat Medicare patients and prevents a spike in milk prices.

As of mid-afternoon Monday, the sticking point involved the "sequester," the cuts to spending – about $100 billion to start in 2013 -- that were mandated by the Budget Control Act which President Barack Obama signed into law last year. Republicans have signaled they might let the sequester take effect unless it was offset by other spending cuts; the GOP has also said it might accept a delay, but only for a few months.

The Obama administration, however, was pushing for a longer delay in implementing the sequester. Otherwise, the president said, replacing those automatic cuts must be "balanced" — shorthand for a combination of new taxes and other spending cuts.

Obama tried to push talks over the finish line earlier in the afternoon with a statement from the White House.

"Today, it appears that an agreement to prevent this New Year's tax hike is within sight," the president said at the White House on Monday. "But it's not done."

In the absence of a broader agreement to resolve the sequester, McConnell appeared in the Senate floor to request a vote only on the tax element of the fiscal cliff.

"Let's pass the tax relief portion now," he said. "Let's take what's been agreed to and keep moving."

But it's not clear that Democrats, who were led in negotiations by Vice President Joe Biden, would agree to de-link the tax debate from other fights over the sequester and extending expiring unemployment benefits past Dec. 31.

House Republicans were careful to note that it was still possible for them to add votes late on New Year's Eve. But they also argued that there was no Senate-passed legislation on which they could schedule a vote, making the prospect of avoiding the cliff all the less likely.

Democratic and Republican sources in the House told NBC News that a final vote on any deal would now most likely wait until afternoon on New Year's Day, or even on Jan. 2.

Though Congress could still conceivably act after New Year's to preserve existing tax rates — thereby limiting any lasting effect on consumers — their inability to reach an agreement until the very last minute could still threaten to rattle the economy and markets.

The House did act late Sunday, though, to clear the way for emergency consideration of Senate legislation if leaders are able to reach an agreement. The House Rules Committee convened with the purpose of dispensing with a rule instilled by Republicans in the early days of 2011 to require that legislation be posted online for a full 72 hours before a vote in the House. GOP leaders had sought that rule to showcase their own transparency, and in reaction to actions by the previous Democratic majority to quickly pass legislation during the health care reform battles of 2010.

Republicans' move to sidestep their own rule underscores the urgency of fiscal cliff talks in the final hours of 2012. There were few ironclad assurances, though, that any Senate agreement would necessarily win the support of the House.

The lurching nature of legislating has been characteristic of the Congress during the last two years, and that's a phenomenon that may well continue into the next Congress, when Democrats will continue to retain control of the Senate, and Republicans will hold a slightly slimmer grasp on the House.

Gallup has released its list of "Most Admired Woman and Most Admired Man" living anywhere in the world, and for the 11th year in a row, Hillary Clinton tops the list of women, while Barack Obama is the most admired man for the fifth year in a row. 

Kevin Lamarque / Reuters

Secretary of State Hillary Clinton delivers a speech "Frontlines and Frontiers: Making Human Rights a Human Reality" at Dublin City University in Ireland in this file photo from Dec. 6, 2012.

First Lady Michelle Obama, Oprah Winfrey and Condoleezza Rice are next behind Clinton.

Behind Obama are Nelson Mandela, Mitt Romney, Billy Graham, George W. Bush and Pope Benedict XVI. 

The "Most Admired Man" poll began in 1946 and was expanded to include "Most Admired Woman" in 1948.  

Clinton has topped the list 17 times in the last 20 years, starting in 1993. Eleanor Roosevelt comes in second as the most "Most Admired Woman," a designation she gained 13 times. 

Dwight Eisenhower was the "Most Admired Man" 12 times, the most for any man, followed by Ronald Reagan and Bill Clinton, who each had eight first-place finishes.

The results are based on a Gallup poll taken from Dec 19 to 22nd.

UPDATED 11: 40 AM ET: There is an emerging deal to avert the fiscal cliff, led by negotiations between Senate Minority Leader Mitch McConnell and Vice President Joe Biden, but the key sticking point remains the sequester and deficit reduction, aides say.

Biden and Republican Leader Mitch McConnell exchanged phone calls until about midnight last night and aides continued beyond that, aides tell NBC News. Democratic Leader Harry Reid left Capitol Hill in the evening Sunday and was not directly involved last night.

Aides say the Vice President and McConnell spoke at 12:45 am and again at 6:30 am this morning. GOP sources say the inclusion of the vice president has made a favorable difference in the talks, given his understanding of legislation and his personal relationships.
Two senior aides to McConnell continued with White House representatives overnight and again today.

GOP aides say they expect their party to likely defer its biggest fight over deficit reduction when the debt-ceiling debate takes center stage in the new year. Republicans say given the time left, there is limited, if no chance, to secure specific detailed alternative spending cuts right now.  

Republicans would like to see the "sequester" across the board cuts kept in place to drive down the deficit, but Democrats are resisting that and offer a two-year delay.

But Democrats caution that the "emerging deal" which "creates another cliff in three months probably would not have the votes to pass the two chambers." That is a reference to the looming fights over the debt ceiling and the overall government budget deadline in March.

Democrats also argue the new revenue generated by tax increases, especially if reduced from the Democrats' earlier targets, should be used to cover the costs of delaying the automatic spending cuts for two years and protecting the long-term jobless with extended benefits. 

Cuts that would go into effect as a result of the sequester would be deep and across the board. The discretionary cuts were signed into law in an effort law to compel Washington to address the long-term deficit. So far, the parties have been unable to agree on replacement cuts that would be targeted and therefore less arbitrary.

The most recent Democratic offer on taxes, presented on Saturday night, is setting the new income threshold at $450,000, sources say. That represents an increase over the president's original $250,000 threshold for higher rates and Obama's later offer to Boehner of $400,000.

Senior Republicans say the GOP is looking for a figure at about $550,000, down from House Speaker John Boehner's $1 million and retaining current estate tax rates. That could mean, say various members, a split-the-difference deal at $500,000.

Significant progress has been made on the income tax threshold and estates taxes, but the figures will not be set in stone until all details are resolved, including unemployment benefits, preventing a scheduled cut to medical provider's Medicare payments (know as the Doc Fix), and a fix to remove millions of middle class taxpayers from the "alternative minimum tax."

The taxes being discussed, by the way, would be made permanent and not given a "sunset provision" in law, which is unusual. There would be no expiration date like the one that forced this debate.

Farewell to the 112^th Congress, regardless of what happens today… But are Biden and McConnell close to a deal?... Why we are still possibly headed off the cliff… Why that would be a missed opportunity for both sides… The blame game… Obama lays out second-term agenda on  “Meet the Press”… Hillary Clinton in the hospital… And Happy New Year.

*** Farewell to the 112^th Congress: With just hours to go before reaching the midnight deadline of the so-called fiscal cliff, are we on the cusp of a last-minute deal? Or will things, once again, fall apart? Regardless of what happens today, the 112th Congress is going to wind up as the least popular and least productive Congress (in terms of legislation becoming law) in the modern era. For starters, Congress’ approval rating the last time the NBC/WSJ poll measured it (in August 2012) was just 12%, and a whopping 82% disapproved of Congress -- the highest percentage in the history of our NBC/WSJ poll. In addition, just 219 bills have been passed into law -- the lowest number since Congress began tracking this number in the 1940s. (And many of these bills were naming courthouses or post offices.)  The previous low was 333 in the 104th Congress (1995-1996). Throughout its history, of course, Congress has always been a dysfunctional place; in fact, the Founding Fathers ensured it that way (with the federal government’s checks and balances). But this particular Congress, which comes to an end on Jan. 3, has been uniquely dysfunctional. Just consider: the current fiscal-cliff debate, the debt-ceiling standoff of 2011 that resulted in an S&P credit downgrade, the Super Committee’s failure, the near government shutdown in the spring of 2011, the defeat of the U.N. Disabilities treaty, etc. With the debt ceiling, the fiscal cliff, and the near government shutdown, it’s hard not to conclude that Congress has been an active player in the sluggishness of the U.S. economy.

*** But are we close to a deal? All that said, Senate Minority Leader Mitch McConnell and Vice President Biden are very close to a deal. According to a source with knowledge of the negotiations, Biden is offering McConnell raising tax rates on income above $400,000-plus and an up-or-down vote on the estate tax in return for unemployment insurance and having the sequester offset by some of the increased revenues. (Folks, this is VERY similar to deal that President Obama offered House Speaker John Boehner, but from which Boehner walked away.) From what we understand, McConnell wants a deal -- he wants to get this tax issue off the table. So they are close. The question is whether Boehner would bring such a deal to the floor and whether it could pass in time. But if a Biden-McConnell deal gets 70 or more votes in the Senate, Boehner might not have no choice but to bring the legislation to the House floor.

Kevin Lamarque / Reuters

Vice President Joe Biden looks on during a White House event in which President Barack Obama announced the nomination of Senator John Kerry as Secretary of State, Dec. 21, 2012.

Related: Deficit reduction becomes key sticking point on fiscal cliff

*** Why we are possibly headed off the cliff: So it’s possible Congress could still come to some kind of agreement, but it's always been a likely outcome that we're headed to go off the so-called fiscal cliff. The reason: It's become the easiest -- and safest -- path for both sides; NBC's Mike Viqueira has called it the "inertia scenario." For Democrats, going over the cliff ensures the elimination of the Bush tax cuts, and it gets them the tax revenue they've been demanding without having to give up a thing. What's more, Democrats probably hold the upper hand if we go off the cliff, given all the polling suggesting that the American public would blame Republicans more than Democrats. For Republicans, having the Bush tax cuts expire means they don't have to vote to raise taxes and thus break any tax pledge. Instead, beginning in the New Year, they get to vote to lower them for the middle class (the income threshold TBD). 

*** Why that would be missed opportunities for both sides: But if we go over the cliff -- the combination of tax increases and spending cuts set to commence after today -- it will be a missed opportunity for both sides, too. For President Obama, it will be evidence that the GOP "fever" that he said would break after his re-election hasn't come close to ending yet. In addition, it would signal that the second-term agenda he's pursuing (immigration, energy) probably isn't going anywhere. For Republicans, going over the cliff means that they're giving up revenue without getting anything in return like spending cuts and entitlement reform, both of which Obama was willing to offer. Republicans believe that they'll be able to extract those things in a future showdown of the debt ceiling, but we're unsure that the White House or, more importantly, the business community is willing to play that game in 2013. 

*** What happens if we go over the cliff: But here’s an important reminder if we go over the fiscal cliff: The financial/economic world won’t come to an end, at least in the short run. While some things will take place immediately, others (including rising tax rates and government cuts) will be spread out over the year, and Congress has the ability to fix them retroactively. As the New York Times wrote last week, “Some hits — like a two percentage point increase in payroll taxes and the end of unemployment benefits for more than two million jobless Americans — would be felt right away. But other effects, like tens of billions in automatic spending cuts, to include both military and other programs, would be spread out between now and the end of the 2013 fiscal year in September. These could quickly be reversed if a compromise is found. Similarly, the expiration of Bush-era tax cuts on Jan. 1 would not have a major impact on consumers if Congress quickly agreed to extend them for all but the wealthiest Americans in early 2013, as is widely expected. Other probable changes, like a jump in taxes on capital gains and dividends, would most likely be felt over a broader period rather than as an immediate blow to the economy.” Yet one thing is for certain if we go over the cliff: The financial markets won’t like it.

*** The blame game: In his interview on “Meet the Press,” President Obama said congressional Republicans would get the blame if the country goes over the fiscal cliff. “Congress has not been able to get this stuff done. Not because Democrats in Congress don't want to go ahead and cooperate, but because I think it's been very hard for Speaker Boehner and Republican Leader McConnell to accept the fact that taxes on the wealthiest Americans should go up a little bit, as part of an overall deficit reduction package.” When NBC’s David Gregory asked Obama if he would deserve any blame, the president replied, “I negotiated with Speaker Boehner in good faith and moved more than halfway in order to achieve a grand bargain. I offered over a trillion dollars in additional spending cuts so that we would have $2 of spending cuts for every $1 of increased revenue. I think anybody objectively who's looked at this would say that we have put forward not only a sensible deal but one that has the support of the majority of the American people, including close to half of Republicans.”

*** Obama’s second-term agenda -- immigration, stabilizing the economy, energy: Also on “Meet,” Obama laid out his second-term agenda. “I've said that fixing our broken immigration system is a top priority. I will introduce legislation in the first year to get that done… The second thing that we've got to do is to stabilize the economy and make sure it's growing. Part of that is deficit reduction. Part of it is also making sure that we're investing, for example, in rebuilding our infrastructure, which is broken… Number three. We've got a huge opportunity around energy. We are producing more energy and America can become an energy exporter. How do we do that in a way that also deals with some of the environmental challenges that we have at the same time? So that's going to be a third thing.” But what Obama DID NOT bring up on his own -- guns. Indeed, he didn’t sound like a guy ready to go after guns, unless the public is clearly behind it. “Ultimately, the way this is going to happen is because the American people say, ‘That's right. We are willing to make different choices for the country and we support those in Congress who are willing to take those actions.’”

*** Hillary Clinton checks into hospital: Beyond the fiscal cliff, the other big news is the health of Secretary of State Hillary Clinton. As NBC’s Andrea Mitchell reported on “TODAY” this morning, Clinton is now in a hospital in New York. Her spokesman released this statement last night: “In the course of a follow-up exam today, Secretary Clinton's doctors discovered a blood clot had formed, stemming from the concussion she sustained several weeks ago.  She is being treated with anti-coagulants and is at NewYork-Presbyterian Hospital so that they can monitor the medication over the next 48 hours. Her doctors will continue to assess her condition, including other issues associated with her concussion. They will determine if any further action is required.” Bottom line: This clearly is more serious than we originally thought.

*** Happy New Year! Finally, to all of our readers – have a safe and happy New Year. And thanks for reading us throughout 2012. Your morning First Read note will return on Thursday, Jan. 3.

Click here to sign up for First Read emails.
Text FIRST to 622639, to sign up for First Read alerts to your mobile phone.
Check us out on Facebook and also on Twitter. Follow us @chucktodd, @mmurraypolitics, @DomenicoNBC, @brookebrower

Updated 3:10 p.m. — Senate Democrats said talks toward resolving the so-called fiscal cliff before the end-of-year deadline had hit a "major setback" on Sunday afternoon due to a standoff over proposed changes to Social Security. 

Democrats said that Republicans, led by Minority Leader Mitch McConnell, Ky., are insisting that a deal to resolve the fiscal cliff include what is known as "chained CPI" -- a change in how Social Security benefits are calculated to increase over time. 

Just before a self-imposed deadline at which Senate leaders were set to brief their respective caucuses about a prospective deal, negotiations toward a scaled-back agreement to avoid the onset of automatic tax hikes and spending cuts on Jan. 1 appeared on the verge of breakdown.

Related:Obama: GOP's insistence on halting tax hikes for the wealthy is stopping fiscal cliff deal

McConnell said that he had even reached out to Vice President Joe Biden, a former senator who's helped hammer out previous deals, in hopes of jump-starting the talks. 

"He and the vice president, I wish them well," Senate Majority Leader Harry Reid, D-Nev., said on the Senate floor. 

"In the meantime, I will try to come up with something," Reid added of Republicans' latest proposal, "but at this stage I don’t have a counter-offer to make."

Obama had offered chained CPI — which would essentially reduce the rate of growth in Social Security benefits over time — as part of a broader "grand bargain" he had previously proposed to Republicans. The GOP rejected that proposal, and moved from there onto House Speaker John Boehner's "Plan B," an ultimately unsuccessful effort. 

In his interview earlier today on NBC's "Meet the Press," the president pointed to his offer on chained CPI as evidence of his willingness to compromise in pursuit of a broad fiscal deal. 

"One of the proposals we made was something called Chain CPI, which sounds real technical but basically makes an adjustment in terms of how inflation is calculated on Social Security," Obama said. "Highly unpopular among Democrats. Not something supported by AARP. But in pursuit of strengthening Social Security for the long-term I'm willing to make those decisions."

A Senate Democratic aide said that Democrats had thought such a proposal was off the table, though, as part of the talks toward parried-down agreement. 

"It’s basically a poison pill," the aide said of Republicans' demand for chained CPI.

Sen. Lindsey Graham, R-S.C., expressed bewilderment at the breakdown, suggesting that there were more than enough votes for a compromise measure that didn't include chained CPI.

"I don't know what caused this but there's a critical mass of 80 senators who would vote to fix the [alternative minimum tax], the doc fix, extend unemployment insurance, protect everybody 500 thousand and below from a tax increase," he told reporters at the Capitol. "There's 80 senators who will do that without CPI."

McConnell, who spoke briefly on the Senate floor around 2 p.m., struck an ever-so-slightly sunnier note.

"There is no single issue that remains an impossible sticking point," the top Senate Republican said.  "I want everyone to know I'm willing to get this done. But I need a dance partner."

Senators are set to huddle with members of their respective parties this afternoon amid votes to discuss the latest as it relates to the fiscal cliff.

As House members return to town this evening for votes this evening, they'll also caucus with fellow party members to discuss what, if any, way forward there is on the fiscal cliff.

NBC's Frank Thorp contributed reporting.

While all eyes remain fixated on the nation’s budget woes and the so-called fiscal cliff negotiations, President Barack Obama told NBC News on Sunday that he has more ambitious goals in mind for his second term.

In an exclusive interview with NBC’s “Meet the Press,” Obama said that there are several major issues sitting atop his agenda for the next four years, including immigration, economic growth, energy issues, the environment, and gun violence.

The president discussed efforts to address gun violence and immigration with particular urgency on Sunday.

Read the full transcript

"I've said that fixing our broken immigration system is a top priority," he said. "I will introduce legislation in the first year to get that done. I think we have talked about it long enough."

And in the aftermath of December's deadly elementary school shooting in Newtown, Conn., the president vowed to put his "full weight" behind the gun violence recommendations he asked Vice President Joe Biden to generate.

Recommended: Obama on Benghazi: 'This was a huge problem'

Obama said that battle would also be fought during the first year of his second term, the success of which the president suggested would hinge upon just how searing the deadly shooting was to the public psyche.

"Will there be resistance? Absolutely there will be resistance," the president told NBC's David Gregory. "And the question then becomes whether we are actually shook up enough by what happened here that it does not just become another one of these routine episodes where it gets a lot of attention for a couple of weeks and then it drifts away. It certainly won't feel like that to me.  This is something that was the worst day of my presidency. And it's not something that I want to see repeated."

Obama also said he was "skeptical" of the National Rifle Association's proposal to put an armed guard in every school, though he said he would not "prejudge" any proposals to address mass shooting events.

Those items alone might constitute an ambitious agenda for a second-term president, who, history suggests, has a limited timetable to accomplish top goals before the waning powers of a lame-duck presidency set in.

But Obama added to that list two other priorities which eluded him in his first term. He said energy and the environment would be a "third thing" on his second term agenda, for instance.

"We've got a huge opportunity around energy. We are producing more energy and America can become an energy exporter," the president said. "How do we do that in a way that also deals with some of the environmental challenges that we have at the same time?"

The president acknowledged, though, that his top priority is preventing automatic tax hikes on all Americans come Jan. 1 as part of the fiscal cliff. That battle has been playing out vividly in Washington during the final days of 2012, and directly involves the fourth priority as described by Obama: stabilizing and growing the economy.

"Part of that is deficit reduction. Part of it is also making sure that we're investing, for example, in rebuilding our infrastructure, which is broken," he said, arguing that the combination of spending cuts elsewhere and new investments would help stabilize the economy.

But Obama's ability to accomplish those four priorities — and then some — could be sapped by the protracted fiscal cliff battle, or any of the other legislative battles he might encounter along the way.

Related: Obama: GOP's insistence on halting tax hikes for the wealthy is stopping fiscal cliff deal

Immigration reform, for instance, had failed to advance over the objections of Republicans during Obama's first term. He said during the campaign that he would seek comprehensive reforms again in his second term, predicting that, if Republicans fared poorly enough with Hispanic voters during the election, they might relent in their opposition to an immigration bill.

Pete Souza / White House Photo

President Barack Obama is interviewed by David Gregory of NBC's "Meet The Press" in the Blue Room of the White House, Dec. 29, 2012. (Official White House photo by Pete Souza)

In fact, the GOP did not fare particularly well with the increasingly important bloc of Latino voters, but the question of whether they would relent on immigration reform was an untested proposition.

Other tough battles that could inhibit these goals include pending Cabinet confirmations. While Obama has nominated a new secretary of state — Massachusetts Sen. John Kerry — he denied having settled upon former Sen. Chuck Hagel, R-Neb., as his new secretary of defense. But Obama also shielded Hagel, reportedly a front-runner for the defense gig, by saying he sees nothing in the former senator's record as disqualifying.

And there were other second term commitments Obama resisted; he would not commit to significant reforms to entitlement programs like Medicare and Social Security during the first year of his second term, for instance.

At several points in his "Meet the Press" appearance, Obama referenced President Abraham Lincoln and the recently-released film about Lincoln's pursuit of the 13th Amendment, and the trade-offs needed to achieve that goal. Obama invoked that example on both gun control and the fiscal cliff, saying that while he was not comparing himself to Lincoln, that movie offered a lesson in the occasional ugliness of political leadership.

"A, I never compare myself to Lincoln and, B, obviously the magnitude of the issues are quite different from the Civil War and slavery," he said. "The point, though, is democracy's always been messy. And we're a big, diverse country that is constantly sort of arguing about all kinds of stuff.  But eventually we do the right thing."

President Barack Obama on Sunday called security issues that led to the deaths of four Americans in the Benghazi consulate attack "a huge problem," although he continued to defend U.N. Ambassador Susan Rice as a victim of political scapegoating by Republicans who have suggested an administration coverup of the situation. 

"We're not going to be defensive about it," Obama said of the State Department review of the attacks during an exclusive interview on NBC's Meet the Press. "We're not going to pretend that this was not a problem.  This was a huge problem.  And we're going to implement every single recommendation that's been put forward." 

Read the full transcript

Saying that some State Department officials "have been held accountable," Obama said that the review of the September 11 attack showed there was "sloppiness" in terms of security measures but that mistakes were not intentional. 

But he defended U.N. Ambassador Susan Rice, who withdrew from consideration to succeed Secretary of State Hillary Clinton after Republicans vigorously opposed her for her role in discussing the attacks after the raid.

"She appeared on a number of television shows reporting what she and we understood to be the best information at the time," Obama said. "This was a politically motivated attack on her.  I mean, of all the people in my national security team, she probably had the least to do with anything that happened in Benghazi."

Obama indicated that intelligence officials have "good leads" as to who carried out the attack.

"With respect to who carried it out, that's an ongoing investigation," he said. "The F.B.I. has sent individuals to Libya repeatedly.  We have some very good leads, but this is not something that I'm going to be at liberty to talk about right now."

Updated at 1:30 p.m. ET:  President Barack Obama on Sunday said congressional Republicans and their insistence on preventing tax increases for the very wealthy are standing in the way of a deal to avoid the so-called fiscal cliff.

In an exclusive interview on NBC's "Meet the Press," the president chided House Republicans as the clock continued to run out on a potential agreement.

"They say that their biggest priority is making sure that we deal with the deficit in a serious way, but the way they're behaving is that their only priority is making sure that tax breaks for the wealthiest Americans are protected," Obama said. "That seems to be their only overriding, unifying theme."

House Speaker John Boehner issued a statement shortly after Obama's interview was broadcast accusing the president of backpedaling on "needed cuts and reforms" that he had previously agreed upon.

With a little more than one day remaining before the nation faces automatic spending cuts and tax hikes that could impact an already-wobbling American economy, the president implied that there has been little progress in recent days to justify hopes of a last-minute deal to prevent going over the fiscal cliff at year's end.

"I was modestly optimistic yesterday, but we don't yet see an agreement," he said in the interview, taped on Saturday at the White House. "And now the pressure's on Congress to produce."

Read the full transcript

The president appeared open to eliminating at least some of the scheduled automatic spending cuts if Republicans agree to tax increases for the wealthy. Those cuts are slated to impact defense spending and non-entitlement discretionary spending beginning on Jan. 1. 

"If we have raised some revenue by the wealthy paying a little bit more, that would be sufficient to turn off what's called the sequester, these automatic spending cuts, and that also would have a better outcome for our economy long-term," he said. 

The president challenged Republicans to vote on legislation that he said should be introduced by the Democrat-controlled Senate to prevent taxes on the "middle class" from being increased.

But he did not specify what income level he would be willing to accept as a dividing line between those who retain Bush-era tax rates and those whose rates would increase. The president has consistently supported increasing taxes on families making over $250,000 a year, but that figure has been a major bargaining chip in negotiations.

Wherever the line on tax increases ends up, Obama urged a vote in both houses on a final Senate bill if a broader agreement cannot be reached.

Pete Souza / White House Photo

President Barack Obama is interviewed by David Gregory of NBC's "Meet The Press" in the Blue Room of the White House, Dec. 29, 2012.

"Everybody should have a right to vote on that," he said. "If Republicans don't like it, they can vote no. But I actually think that there's a majority support for making sure that middle class families are held harmless."

"So far, at least, Congress has not been able to get this stuff done," he added. "Not because Democrats in Congress don't want to go ahead and cooperate, but because I think it's been very hard for Speaker Boehner and Republican Leader McConnell to accept the fact that taxes on the wealthiest Americans should go up a little bit, as part of an overall deficit reduction package."

Dismissing the notion that the Democratic Party is as compromise-averse as the GOP, the president said Democrats  -- "warts and all" -- have more consistently agreed to components of bipartisan deals. 

"What I'm arguing for are maintaining tax cuts for 98 percent of Americans. I don't think anybody would consider that some liberal left-wing agenda. That used to be considered a pretty mainstream Republican agenda," he said. "And it's something that we can accomplish today if we simply allow for a vote in the Senate and in the House to get it done. The fact that it's not happening is an indication of how far certain factions inside the Republican Party have gone where they can't even accept what used to be considered centrist, mainstream positions on these issues."

The president offered no new suggestions of compromise measures that may be more palatable to Republicans, although he acknowledged that some Democrats oppose entitlement adjustments and some of the spending cuts that he's put forward during negotiations. 

"The offers that I've made to [Republicans] have been so fair that a lot of Democrats get mad at me," he said, noting that his acceptance of Chained CPI, a measure that would change the way Social Security payments are determined, has caused particular rancor within his own party.

"Highly unpopular among Democrats," he said of the proposed change. "Not something supported by AARP. But in pursuit of strengthening Social Security for the long-term I'm willing to make those decisions."

If an impasse remains in place, Obama warned, Republicans' rejection of his version of deficit reduction plans would be enough to send financial markets skidding. 

"What's been holding us back is the dysfunction here in Washington," he said. "And if people start seeing that on January 1st this problem still hasn't been solved, that we haven't seen the kind of deficit reduction that we could have had had the Republicans been willing to take the deal that I gave them, if they say that people's taxes have gone up, which means consumer spending is going to be depressed, then obviously that's going to have an adverse reaction in the markets."

In his statement, Boehner, R-Ohio, called Obama's comments "ironic," saying that "a recurring theme of our negotiations was his unwillingness to agree to anything that would require him to stand up to his own party. Needed cuts and reforms that the president agreed to just last year were no longer on the table, as he cited an inability to sell them to Democrats.

"In an effort to get the president to agree to cut spending -- which is the problem -- I put revenues on the table last year, and I put them on the table again last month.  Republicans made every effort to reach the 'balanced' deficit agreement that the president promised the American people, while the president has continued to insist on a package skewed dramatically in favor of higher taxes that would destroy jobs. We've been reasonable and responsible. The president is the one who has never been able to get to 'yes.'"

NBC News' Frank Thorp contributed to this report.

Pete Souza/Official White House photo

President Barack Obama is interviewed by David Gregory of NBC's "Meet the Press" on Saturday, Dec. 29, 2012 in an official White House photo by Pete Souza.

As the hours remaining for action dwindle, Washington and the nation prepared to hear more from President Barack Obama about the outlines of an acceptable deal to avert the so-called fiscal cliff while Democratic and Republican leaders on Capitol Hill labored through what would normally be a relaxing holiday weekend.

After tasking the Senate with generating a compromise that would avert the onset of across-the-board automatic tax hikes and spending cuts on Jan. 1, the president was set to address some of the trade-offs he might accept in an interview Sunday on NBC's "Meet the Press."

The round-the-clock talks were the byproduct of a meeting at the White House on Friday between the president and congressional leaders from both parties as the urgency to avoid the New Year's Day deadline increases. Those discussions produced a shift between the generally unilateral negotiations between Obama and House Speaker John Boehner, R-Ohio, and toward new negotiations between Senate Majority Leader Harry Reid, D-Nev., and his Republican counterpart, Minority Leader Mitch McConnell of Kentucky.

PRESS PASS: Obama on 'Meet the Press' in Sunday exclusive

For his part, Boehner has demanded that the Senate act first to produce legislation, on which he said the House would act — to either approve or amend it.

But the Saturday negotiations between Reid and McConnell appeared — outwardly, at least — to yield little in the way of consensus. Obama said Friday that if the Senate leaders could not strike a deal, he would ask Reid to advance bare-boned legislation that would preserve tax rates on income under $250,000 and extend expiring benefits for the unemployed.

Related: Senate leaders work to beat fiscal cliff clock

A Senate Democratic aide said Saturday afternoon that Democrats were preparing to move ahead with that very plan and were not particularly optimistic about the prospects of reaching an accord with McConnell, whom they characterized as offering proposals he knows the Democrats will not accept.

Reid did not go to the Capitol on Saturday, the aide said, and talks played out primarily at a staff level and talks were expected to continue.

A Senate Republican aide, meanwhile, cautioned against expecting an announcement or news before tomorrow afternoon, at which point senators will be briefed then about the weekend talks. The House will also return for work on Sunday evening, around 6:30 p.m. ET.

"We have been in discussions all day, and they continue. And we will let you know as soon as we have some news to make," McConnell told reporters Saturday as he left the Capitol. "We have been trading paper all day and talks continue into the evening."

With his interview Sunday morning, Obama might look to add a new sense of urgency to the last-minute negotiations to avoid the fiscal cliff, which itself is an outgrowth of lawmakers' inability to reach any consensus in the past two years about how to address taxes and the rising national debt.

Related: More coverage of 'Meet the Press'

Obama led Democrats this year by campaigning for re-election on allowing the 2001 Bush tax cuts — which the president in 2010 agreed extend for two years past their original expiration date — to end for the wealthiest Americans. Republicans struck conciliatory notes after Obama's victory in November, but that language has given way over the course of negotiations to more familiar sniping over taxes and spending.

From "47 percent" to "oops" to "you didn't build that," the 2012 campaign was full of memorable moments that arguably changed the trajectory and rhetoric of the presidential race, influencing conversations about the role of government, the essentials of leadership, and the direction of the country.

Aaaaaand then there was all the other stuff.

The first campaign in which ideological scuffles were waged on Twitter, the 2012 race was noteworthy for its moments of pure silliness, when there was little observers could do except use their 140-character allotments for snarky pronouncements like "#headdesk."

So, with apologies to the Happy Days episode that birthed the phrase "to jump the shark," here's our list of the Top 10 "shark-jumping" political moments of 2012:

10. The Drudge Report floats Petraeus for VP.  Despite overwhelming evidence -- even more overwhelming in retrospect -- that the now-resigned CIA director was hardly a slam-dunk to be on the GOP ticket, reporters scurried frantically to shoot down a Drudge Report siren floating Gen. David Petraeus for Mitt Romney's vice presidential pick. The news was sourced to "a top fundraiser" who heard it "whispered" by Barack Obama. The Romney-aligned conservative news hub suggested the once-revered general (who resigned after the election in the wake of revelations of an extra-marital affair) after it plugged an exclusive scoop on the implausible pick of Condi Rice for the job.

9. Newt Gingrich is bitten by a penguin at the zoo. While technically still a presidential candidate -- but long after the sheen of his surprise January victory in the South Carolina GOP primary had faded -- it wasn't unusual to hear tales of Newt Gingrich's passion for zoology during the spring of 2012. An April incident at the San Diego Zoo offered LOL-worthy headlines when the former speaker was nipped on the finger by a Magellanic penguin. Hounded for confirmation, Gingrich spokesman R.C. Hammond dutifully vowed that the Band-Aid-prompting injury would not end the candidate's love of animals, saying "Newt is a zoo fan. He will be back."

8. Everyone meta-argues about Big Bird. Asked during the first presidential debate for areas where he would cut federal spending, GOP presidential nominee Mitt Romney pointed to the (relatively minuscule) funds received by PBS, even while asserting earnestly that "I like Big Bird." After a particularly lackluster debate performance by President Obama, the statement offered Romney foes a welcome peg for attacks, including a parody ad in which the goofy avian puppet was derided as a "big, yellow, a menace to our economy." Republicans, in turn ridiculed the Obama campaign's fixation with the Sesame Street protagonist as frivolous, and an exasperated PBS requested that the ad be taken down.

7. A stop at Chick-Fil-A becomes a political act. Liberal lovers of waffle fries faced a difficult choice this summer when Chick-Fil-A president Dan Cathy voiced criticism of same-sex marriage. While Mitt Romney didn't bite, other Republican politicians leveraged the story, flocking to the fast-food joint to show their support for Cathy's socially conservative views. Sarah Palin, Rick Santorum, Mike Huckabee, and then-VP hopeful Tim Pawlenty all publicly backed the franchise that launched the "Eat Mor Chikin" campaign, while some Democratic pols threatened to keep new stores from opening and pilloried the restaurant with labels like "hate chicken." The chain later - ahem -- "waffled" on its stance, agreeing to stop funding groups that fight same-sex marriage.

6. Romney not-really-jokingly laments not being Latino. The "47 percent" remarks were the enduring headline out of Mitt Romney's leaked fundraiser remarks, but the nominee also raised some eyebrows when he joked to attendees that he would have been much more likely to win the presidency if his father had been Mexican. "He was born in Mexico… and had he been born of, uh, Mexican parents, I’d have a better shot at winning this," Romney said to reported crickets from the audience of donor heavyweights. "But he was unfortunately born to Americans living in Mexico. He lived there for a number of years. I mean, I say that jokingly, but it would be helpful to be Latino.” Si se puede!

5. The Trump "October surprise." Remember this? Donald Trump sent the Twitter machine into a frenzy after he promised a "revelation" that would derail the president's re-election efforts. The rumor mill indicated that the bombshell could be some kind of divorce records from Obama's past, a claim which turned out to be far more potentially interesting than Trump's actual revelation -- which was to offer $5 million to the charity of Obama's choice in exchange for the president's college and passport records. The news dud served to remind voters of Romney's tortured embrace of the coiffed billionaire in a February endorsement, which Romney accepted by deadpanning, "There are some things you can't imagine ever happening in your life. This is one of them."

4. Spandexed Rick Perry tweets he's staying in 2012 race. The morning after the Iowa caucuses, political reporters and Perry staff were making arrangements to attend the Texas governor's inevitable dropout press conference when a tweet from the governor's official account pictured Perry in running attire giving a thumbs up -- with the text "Here we come South Carolina!!!" Some close aides initially believed the vow to stay in the race was a hoax. Frazzled reporters chased the candidate to a hotel hallway where they got their first in-person confirmation of the news from Perry's wife Anita, in the form of her declaration that "I LOVE grits!"

3. Joe Biden poses with biker chick. Relentlessly parodied as a dopey muscle-car enthusiast by joke newspaper The Onion, Vice President Joe Biden finally appeared to be merging with his own caricature when he tried to make friends with a trio of bikers at an Ohio diner. The result: an AP photo of Biden nuzzling a grinning female rider as two male companions looked on with impossible-to-describe-in-print facial expressions of annoyance, disbelief and wonderment. (It didn't help that the photo was published within hours of a picture of a Barack Obama being aerially bear-hugged by a large Florida admirer.)

2. Eastwooding. After his appearance in a stark, full page pro-Chrysler ad dubbed "Halftime in America," some Republicans accused Clint Eastwood of being an Obama backer. That presumably gave the gravelly-voiced star's endorsement of Mitt Romney even more heft going in to the Republican National Convention, when no organizers questioned the famous "Dirty Harry" actor as to exactly what he might say on stage. Republicans, along with a primetime audience of millions, looked on with (at best) bewildered amusement and (at worst) horror as Eastwood wandered around the stage spouting insults at an empty chair meant to symbolize the president. Eastwood later admitted -- in the biggest scoop to date for his hometown paper The Carmel Pine Cone -- that he came up with the idea to malign available furniture while in the green room before the speech. "[The Romney team] vets most of the people, but I told them, ‘You can’t do that with me, because I don’t know what I’m going to say,’” Eastwood recalled to the Pine Cone.

1. The "war on women." Little did Hilary Rosen know when she dinged Ann Romney's career choices on CNN that she was touching off a seven-month battle that would be dubbed by both sides as a partisan "war on women." “His wife has actually never worked a day in her life,” said Rosen, a political consultant who advises the Democratic National Committee, launching a rhetorical spitball/Twitter war that continued in various incarnations until  Election Day. Obama campaign aides scrambled to condemn the remark as Ann Romney shot back that she “made a choice to stay home and raise five boys. Believe me, it was hard work."

That opening volley continued through the end of the campaign, with Republicans and Democrats each painting the other group as baby-hating suffrage opponents eager to confine the brightest of women to lady-prisons of convenient stereotypes.

Both sides pointed to issues ranging from the arguably legitimate (economic policies affecting families, contraceptive policies) to the unrepeatable (Rush Limbaugh calling Sandra Fluke a "slut")  to the absurd (demanding that the other side disown the endorsement of a musical artist with unpleasant lyrics about women.)

The silliness may have been best encapsulated by Reince Priebus, who described the back-and-forth thusly: "If the Democrats said we had a war on caterpillars and every mainstream media outlet talked about the fact that Republicans have a war on caterpillars, then we'd have problems with caterpillars."

For which he had to apologize.

Updated 2 p.m. ET -- Congressional negotiators burrowed into their Capitol offices on Saturday to see if they can stop the economy from falling off of a "fiscal cliff" in just three days when the biggest tax increases ever to hit Americans in one shot are scheduled to begin.

Aides to Senate Majority Leader Harry Reid, a Democrat, and Senate Republican leader Mitch McConnell were expected to work through the day on a possible compromise that would set aside $600 billion in tax increases and across-the-board government spending cuts that are set to kick in next week. 

A variety of lower taxes are scheduled to expire on December 31. If allowed to rise, the approximately $500 billion value of the revenue increases would represent a historic hike when taken together.

The combined punch of the tax increases and spending cuts would likely put the U.S. economy into a downward spiral, according to economists' forecasts. 

"We're now at the point where, in just a couple days, the law says that every American's tax rates are going up. Every American's paycheck will get a lot smaller. And that would be the wrong thing to do for our economy," President Barack Obama said in his weekly radio and Internet address, which was broadcast on Saturday. 

At midday, McConnell walked into his office on the second floor of the Capitol. Asked by waiting journalists if he thought his efforts would be successful, McConnell responded: "I hope so."

A Senate Republican leadership aide said that it might not be known until sometime on Sunday whether these talks bear fruit. That is when leaders are expected to brief their rank-and-file members.

The Senate is scheduled to hold a rare Sunday session beginning at 1 p.m. EST (1800 GMT), but it was not clear whether the chamber would have fiscal cliff legislation to act upon. 

Related: 'Do something!" Americans fed up with Washington over fiscal cliff negotiations

Reid and McConnell and their staffs held last-ditch negotiations Friday night and resumed on Saturday with no guarantees that their efforts would pay off. Republicans remained opposed to Obama's demand that households making above $250,000 a year see their income tax rate rise to 39.6 percent, from the current 35 percent, in order to help tame budget deficits.

In recent days, some aides have said that a $400,000 threshold, instead of $250,000, has been discussed as a possible compromise.

Democrats and Republicans also are jousting over what to do about inheritance taxes on estates.

Unless Congress acts, the tax is set to jump on January 1 to 55 percent with the first $1 million exempted for individuals. Currently, there is a 35 percent tax and a $5 million exemption.

One Democratic aide was pessimistic that McConnell would come up with a counteroffer that Reid would find acceptable. Such a counteroffer would have to be calibrated in a way that also could attract votes from conservative House Republicans, many of whom have balked at any tax rate increases.

Evan Vucci / AP

Senate Majority Leader Harry Reid of Nev. leaves the White House in Washington, Friday, Dec. 28, 2012, after a closed-door meeting between President Barack Obama and Congressional leaders.

Similarly, a senior House Republican aide on Saturday voiced pessimism about prospects for a deal.

Related: Obama to appear on 'Meet the Press'

"It's hard to see Reid agreeing to anything that can get the votes of the majority of the majority in the House, thereby allowing a bipartisan accomplishment," the aide said. A "majority of the majority" refers to the 241 Republicans who are in the 435-member House.

The Republican aide placed the blame squarely on Democrats, as many Republican members have done publicly, saying that going off the fiscal cliff is a "policy upside" for them. "Higher taxes, devastating defense cuts. The polls tell them they can win the PR war in January. From their perspective, why stop the cliff dive?"

Democrats, in turn, have publicly accused Republican House Speaker John Boehner of preferring to put off any tough fiscal cliff votes until after a January 3 House election in which he is expected to win another two-year term as speaker.

If McConnell and Reid can manage to reach a deal on inheritance taxes and raising income tax rates on the wealthiest, they likely would throw into the compromise some other fiscal cliff solutions.

Those could include extending an array of other expiring tax breaks, such as one that encourages companies to conduct research and development. Also, Congress wants to prevent a steep pay-cut in January for doctors who treat elderly Medicare patients.

Lawmakers also want to prevent middle-class taxpayers from inadvertently creeping into a higher tax bracket, known as the alternative minimum tax, intended for the wealthiest.

If the Reid-McConnell effort fails, Obama has asked the Senate to hold a vote on Monday on a "basic package" that would stop taxes from going up on the middle class and would extend long-term unemployment benefits that are about to expire. If it passed the Senate, its fate would be in the hands of the Republican-controlled House.

This Sunday, David Gregory sits down exclusively with President Barack Obama. This will be Mr. Obama's 11th appearance on the program, his second time as the commander in chief. In the midst of fierce fiscal cliff negotiations, we’ll hear directly from the president about where things stand and whether a compromise is even possible. Plus, David will talk with him about other key issues facing the country as he prepares to begin his second term in office.

His most recent appearance was on Sept. 20, 2009 in the Roosevelt Room of the White House. At the time, the health care reform fight was center stage in Washington and the President joined MTP to make his case for the overhaul. Watch the full interview below.

Transcripts from Barack Obama's Meet the Press appearances:

• 7/25/04
• 11/7/04
• 1/22/06
• 10/22/06
• 11//11/07
• 12/30/07
• 5/4/08
• 7/27/08
• 12/7/08
• 9/20/09

Updated 6:30 p.m. ET -- President Barack Obama tasked the United States Senate with trying to resolve the “fiscal cliff” in the waning hours before the New Year following a meeting between congressional leaders and the president.

Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., will lead the last-minute effort to avert the automatic tax hikes and spending cuts set to take effect on Jan. 1 unless Congress acts. 

And Obama said he is “optimistic” they can reach an accord before midnight on New Year’s Eve, the point at which the government would hit the fiscal cliff.

Absent that, the president said he had asked Reid to instead advance a bare-boned proposal that would extend the 2001 Bush tax cuts for income under $250,000.

Related -- Cliff Notes: Five things to watch at today's White House meeting

“I still want to get this done,” Obama said after his discussions with congressional leaders. He said “the hour for immediate action is here. It is now." 

The president will appear exclusively on Sunday on NBC's "Meet the Press," where he's expected to further outline steps toward reaching a final deal.

The White House talks -- at which Obama presented no new offer to Republicans in Congress -- yielded “no concrete proposal,” Reid told reporters at the Capitol following the meeting.

But in the waning hours before the end-of-year deadline, senators are now scrambling to produce a bipartisan package, at the request of Speaker John Boehner, R-Ohio, that can muster enough support in the House.

Reid, McConnell, Boehner, and House Minority Leader Nancy Pelosi, D-Calif., spent the meeting “discussing potential options and components for a plan that could pass both chambers of Congress,” according to a Boehner aide. 

But the most significant development appeared to be the emerging consensus that any final agreement would have to emerge from the Senate. That deal would necessarily require a “bipartisan approach,” according to the office of McConnell, the Republican leader in the upper chamber.

Among the major sticking points, senior Democratic aides told NBC’s Kelly O’Donnell, involve the income threshold at which tax rates would be allowed to rise and the level at which estates are taxed.

Boehner’s failed effort last week to push through a fallback plan with only Republican votes laid bare the internal GOP divisions after conservatives balked at supporting a plan from the speaker to allow tax rates to rise on income over $1 million.

The unsuccessful effort suggested that Boehner would need to lean upon Pelosi for Democratic votes if a deal -- which has eluded Obama and Congress for the better part of the last two years -- is to pass. 

A Senate-led agreement, though, faces no surefire guarantee of passage in the House. 

“The speaker told the president that if the Senate amends the House-passed legislation and sends back a plan, the House will consider it -- either by accepting or amending,” Boehner’s aide emailed reporters.

The protracted stalemate between Obama-led Democrats and congressional Republicans had prompted Friday's last-ditch meeting at the White House. It lasted just over an hour, and included Vice President Joe Biden and Treasury Secretary Tim Geithner.

Sources familiar with the meeting said that Obama made no new offer to Republicans, urging them to hold an up-or-down vote on a Democratic proposal to preserve existing tax rates for income under $250,000 and extend unemployment benefits (among other unresolved issues). 

It’s that very proposal which Obama said he would ask Reid to advance should he and McConnell fail to strike a deal. 

“I believe such a proposal could pass both houses with bipartisan majorities, as long as those leaders actually allow it to come to a vote,” he said.

Republicans had previously rejected such a proposal, but could feel pressure to relent to administration pressure in order to forestall across-the-board tax hikes in just a few days. The source familiar with the meeting told NBC's Peter Alexander and Kristen Welker that Obama asked Republicans what they would be willing to support, if not that proposal.

Amid negotiations toward a final deal, the House was set to return to Washington on Sunday at Boehner’s request, and remain at work through Jan. 2 -- the final day before the 112th Congress concludes and the next batch of lawmakers are sworn into office.

In the meanwhile, Obama voiced frustration toward the repeated pattern in Congress these past few years of lurching from crisis to crisis before reaching a last-minute deal to stave off catastrophe. 

“The American people are watching what we do here. Obviously, their patience is already thin. This is deja vu all over again,” Obama said. “America wonders why, for some reason, in this town you can’t get stuff done in an organized timetable ... The American people are not going to have any patience for a politically self-inflicted wound to our economy.”

House and Senate leaders from both parties will make their way to the White House this afternoon at President Barack Obama’s request for a last-ditch effort to reach an agreement to avoid the impending fiscal cliff.

Related: Obama bringing lawmakers to Oval Office for last-minute 'cliff' talks

The parties will enter the meeting seeming as far apart as ever on an agreement to avert the combination of automatic tax hikes and spending cuts set to take effect on Jan. 1. Republicans, led by House Speaker John Boehner, R-Ohio, say they have acted – by passing an extension of all of the expiring Bush tax cuts, an unpalatable proposition to Democrats – and now it’s the Senate’s turn.

The speaker’s office said Boehner “will continue to stress that the House has already passed legislation to avert the entire fiscal cliff and now the Senate must act” at tomorrow’s meeting.

And the Senate, led by Majority Leader Harry Reid, D-Nev., is demanding that the GOP-held House assents to a bill that would allow taxes to rise on income over $250,000 per year.

This posturing by both parties amounts to little more than a stalemate in lawmakers’ effort to avert the fiscal cliff, just days before the deadline to forge a deal. With that in mind, here are the variables to watch, which could signal either breakthrough or failure on the fiscal cliff.

TONE: Hopes for a fiscal cliff compromise spiked on Nov. 16 when the same congressional leaders who are gathering Friday appeared jointly following their first meeting at the White House to hail the “constructive” conversation, all the while avoiding the usual partisan barbs.

Negotiations have deteriorated in the weeks since then, to say the least.

But with time running out before the end-of-year deadline, how or whether lawmakers speak following their meeting with Obama could speak volumes about the prospects for a deal.

If Boehner, Reid, House Minority Leader Nancy Pelosi, D-Calif., and Senate Minority Leader Mitch McConnell, R-Ky., appear jointly – as they did in mid-November – it might portend good things about a potential resolution to the fiscal cliff.

But if they take to the microphones outside the West Wing separately (or issue statements), offering more vitriolic rhetoric and finger pointing, it would suggest bleak prospects for ongoing negotiations.

PROCESS: Much of the recent stalemate in Congress, as outlined above, involves whether it’s up to the House or the Senate to act first to resolve the fiscal cliff.

Recommended: Nearly out of time, lawmakers brace for blame on fiscal cliff

Neither party wants to be the one to make the first major concession, meaning that the House is looking to the Senate (and vice-versa) to be the first chamber to “jump,” so to speak.

Boehner has clearly and repeatedly signaled his desire to let the legislative process take its course. He argues that the Senate should amend any of the earlier tax bills that the Republican House has passed. The Senate could conceivably gut that legislation, replace it with any alternative that the upper chamber desires, and send it back to the House to see whether it can pass.

Alternatively, Reid is simply demanding that Republicans pass an existing Democratic tax bill, which would preserve existing tax rates on income under $250,000 a year. (Republicans counter that this law has a so-called “blue slip” problem –asserting that it’s procedurally flawed because tax bills cannot originate in the Senate, according to the Constitution.)

If the leaders emerge from their meeting at the White House with a clear idea of which chamber might act first, it would be a first step toward resolving the fiscal cliff by the New Year’s Eve deadline.

NUMBERS: Senate Democrats want the House to pass a bill that would preserve existing tax rates on incomes below $250,000.

Obama offered a deal to Boehner that would preserve income beneath a slightly higher threshold: $400,000 per year.

Boehner tried – and failed – to pass a bill (his “Plan B”) that would have kept tax rates the same for all income under $1 million.

If the leaders emerge from the White House today with some sort of number on which they have agreed, it could provide the framework for a final agreement.

Related: Boehner calls House back to Washington on Sunday

Just as important have been the topline numbers – that is, the target total savings in an agreement as collected from new taxes, or alternatively, spending cuts.

The president initially sought $1.6 trillion in new tax revenue before lowering that target to $1.4 trillion. Republicans offered $800 billion in revenue, which they said could be collected through tax reform that closes a number of deductions and loopholes.

At the same time, Obama’s last offer to Boehner included $1.2 trillion in spending cuts, including $400 billion in savings from entitlement programs.

An agreement of that scale seems unlikely with just a few days to go until the deadline, but an agreement on these topline numbers – either on a small deal, or a big deal – would suggest a degree of progress toward a solution.

CAN-KICKING: One option available to lawmakers would be to do something they’ve done all along: punt the problem to a later deadline.

In many respects, the fiscal cliff represents the ultimate example of lawmakers’ habit of kicking the can down the road. The automatic spending cuts that compose part of the cliff grew out of their inability to reach an agreement with Obama on taxes and spending during the debt ceiling fight in 2011. And the impending tax hikes are the byproduct of a two-year extension of the 2001 Bush tax cuts past their original expiration date in 2010.

But what Congress can do, it can also undo. And that means they could conceivably agree to delay the onset of the fiscal cliff for weeks, months or even a year to give themselves breathing room to negotiate a deal.

Furthermore, a decision to delay the fiscal cliff could mean that the contours of a fiscal cliff compromise have taken shape, and that lawmakers just need more time to hammer out the details. Alternatively, another can-kicking incident could rattle markets thanks to another instance of governing by lurching from crisis to crisis. Furthermore, it would do little to resolve the uncertainty on taxes that is hanging over many businesses heading into the new year.

THE FLANKS: Lastly, it’s important to keep an eye on the flanks in both parties – liberal Democrats and conservative Republicans – in terms of how they react to today’s meeting, and any possible deal that might emerge.

How many liberals or conservatives finish the day rattling their sabers, versus sitting on their hands?

The more anger there is on either flank toward any potential proposal, the more difficult it becomes for leaders in the House and Senate to find the necessary votes to approve an agreement – especially in such a politically polarized environment.

The importance of the flanks played vividly last week in the House, when conservatives refused to go along with Boehner’s “Plan B” (the proposal that would have allowed taxes to go up on millionaires) because, as the speaker put it, “they were dealing with the perception that somebody might accuse them of raising taxes.”

Jonathan Ernst / Reuters

President Barack Obama returns from Christmas visit in Hawaii to the White House, Dec. 27, 2012.

Any final agreement will almost certainly have to involve both Democratic and Republican votes. But if either party’s base is incensed by Friday’s meeting at the White House, it would make mustering the political willpower to pass an agreement that much more difficult.

With the deadline to avoid the economy going over the “fiscal cliff’’ looming on Jan. 1, senators from both parties struck an optimistic note on Friday that an agreement can be reached to avoid tax hikes and spending cuts totaling $600 billion.

“I am hopeful there will be a deal that avoids the worst parts of the fiscal cliff, namely taxes going up on middle-class people,’’ Sen. Chuck Schumer (D-N.Y.) told TODAY’s Willie Geist. “I think there can be, and I think the odds are better than people think that there could be.’’

“I think in the end we’ll get a deal,’’ Sen. John Thune (R-S.D.) told Geist. “The question is the timing of that. It is encouraging that sides are sitting down. They continue to have lines of communication there open, and I view that as optimistic as well.”

Senate Majority Leader Harry Reid (D-Nev.), Senate Minority Leader Mitch McConnell (R-Ky.), House Speaker John Boehner and (R-Ohio), and House Minority Leader Nancy Pelosi (D-Calif.) are scheduled to sit down with President Obama on Friday afternoon to continue talks, and Congress will continue to work on an agreement through this weekend. 

The average family earning $50,000-$75,000 a year could see their taxes increase by $2,400 in 2013 if a deal is not reached, according to CNBC’s Tyler Mathisen. Income taxes would also increase at every level, taxes on capital gains and dividends would jump, the alternative minimum tax would hit more families, and long-term unemployment benefits would expire. According to the Tax Policy Center, nearly 90 percent of American households would be affected if a deal is not reached or retroactive fixes do not negate the harsher parts of the fiscal cliff.

Schumer believes a positive development signaling a deal will get done is the simple fact that crucial leaders in the process are engaged in talks with the President.

“I am getting a little more optimistic today,’’ Schumer told Geist. “Sometimes it’s darkest before the dawn, and there are two good signs for optimism today. One is that leader McConnell is actively engaged. For the first time, leader McConnell is speaking to the President. If the Senate is going to be the place where action starts, you need both of them there.

“The second reason for optimism is Boehner is back at the table, because you can’t pass something just through the Senate, and we see what a mess the House is; they couldn’t even pass Speaker Boehner’s own Plan B. The fact that he’s come back and the four of them are at the table means to me, we could come up with some kind of agreement that would avoid the main parts of the fiscal cliff, particularly taxes going up on middle-class people.’’

Thune feels the two sides have to reach an agreement on spending cuts because closing the revenue gap cannot be achieved solely through tax increases. The two political parties remain particularly divided on the issue of raising taxes on the wealthiest Americans to raise revenues and close the U.S. budget deficit.

“What we’d like to see is something that deals with spending,’’ Thune said. “We believe this isn’t a revenue issue; this is a spending issue, and that ought to be a part of any solution. Secondly, we ought to focus on jobs and the economy, and anything that is done ought to be focused on what we can do to get the economy expanding. That makes all these problems much smaller by comparison, but jobs and growth ought to be a guiding principle in this discussion, which is why Republicans are so reluctant to go for these big tax increases that the President is trying to get through.’’

“Obviously there are cuts in the budget,’’ Schumer said. “We know we have to cut some of the mandatory programs and do other cuts, but it has to be accompanied with revenues. I am hopeful, and it can be a balanced package. We’ve always said it could be a balanced package, and the problem has not been Democrats being willing to do cuts – we did a trillion of them last year. We’re willing to do more this year. The problem is revenues.’’

The question remains whether the two sides can agree on a specific amount of tax increases and spending cuts in time to avoid a potentially disastrous situation.

“Republicans have been willing to accept the idea that revenues have to be part of this solution,’’ Thune said. “Right now, we’re at a stalemate because the Democrats haven’t been willing to consider the issue of spending, and all they want to deal with right now is tax increases, and that’s bad for the economy. I think that it’s encouraging that people are talking. There is an agreement out there that can be reached.’’

“When push comes to shove, they will find a way to bridge their differences, and it may not be pretty but it will get done,’’ Greg Ip of The Economist magazine told NBC News. “It may get done in such a chaotic fashion that the economy will pay a price.’’

Read more: 

Here's what happens to you if we go over the fiscal cliff

Obama bringing lawmakers to Oval Office for last-minute 'cliff' talks

Politics: Lawmakers brace for blame

Obama to GOP: 'Take me out of it'

Jonathan Ernst / Reuters

President Obama returns to the White House on Thursday after cutting short a holiday in Hawaii. He will hold at least one meeting with House and Senate leaders to try to avoid the "fiscal cliff."

President Barack Obama and lawmakers were launching a last-chance round of budget talks days before a New Year's deadline to reach a deal or watch the economy go off a "fiscal cliff."

NBC News has confirmed that Obama and Vice President Joe Biden will meet with House and Senate leaders on Friday afternoon to try to revive negotiations to avoid tax hikes and spending cuts -- together worth $600 billion -- that will otherwise begin to take effect on Jan. 1.  Scheduled to attend the Oval Office meeting are Senate Majority Leader Harry Reid (D-Nev.), Senate Minority Leader Mitch McConnell (R-Ky.), House Speaker John Boehner and (R-Ohio), and House Minority Leader Nancy Pelosi (D-Calif.).

Members were divided on the odds of success, with a few expressing hope, some talking as if they had abandoned it, and a small but growing number suggesting Congress might try to stretch the deadline into the first two days of January.

What happens to you if US goes off 'cliff'

In order to be ready to legislate if an agreement takes shape, the Republican-dominated House of Representatives convened a session for Sunday.

And House Majority Leader Eric Cantor advised members to be prepared to meet through Jan. 2, the final day before the swearing-in of the new Congress elected on Nov. 6.

It "doesn't feel like anything that's very constructive is going to happen" as a result of the meeting with Obama, said Sen. Bob Corker (R-Tenn.). "It feels more like optics than anything that's real."

Politics: Lawmakers brace for blame

The two political parties remained far apart, particularly over plans to increase taxes on the wealthiest Americans to help close the U.S. budget deficit. But one veteran Republican, Rep. Jeff Flake of Arizona, held out the prospect that if Obama came through with significant spending cuts, Republicans in the House might compromise on taxes.

Reuters contributed to this report. 

More content from NBCNews.com:

• Desert Storm commander Norman Schwarzkopf dies at 78
• Guns flood into police buyback programs, though critics have doubts about idea
• Officials: Endangered whale dies after getting stranded on NYC beach
• Snow, rain and winds hit Northeast as deadly winter storm continues
• Deadly NY fire ambush survivors: We're 'humbled'
• Sleeping homeless woman set on fire outside Los Angeles drug store

Follow US news from NBCNews.com on Twitter and Facebook

There are a few different cast members, but the dialogue of the fiscal cliff drama is the same as it was yesterday. And the day before that. And the day before that.

Progress on the negotiations remains deadlocked, with a plunge over the cliff looking more and more likely as the remaining hours wane before the looming tax increases and spending cuts are set to take effect at the beginning of next year.

Recommended: Reid: Fiscal cliff failure looks likely due to Boehner's House 'dictatorship'

With House members away from the Capitol until Sunday, Senate leaders Harry Reid and Mitch McConnell spent the lawmakers' first day back after the Christmas holiday mostly rehashing the same rhetorical salvos launched by their House counterparts before the break.  

"I have to be honest — I don’t know, time-wise, how it can happen now," Democratic leader Reid lamented on the Senate floor earlier today, lashing House Speaker John Boehner for ruling the House by "dictatorship" by failing to bring compromise measures backed by Democrats to come up for a vote.

McConnell, the chief negotiator for Republicans in the Senate, also held firm Thursday, slamming Democrats for failing to push measures that could garner sufficient support from Republicans.

"Republicans aren't about to write a blank check for anything Senate Democrats put forward just because we find ourselves at the edge of the cliff," McConnell warned. "It's not fair to the American people."

A cosmetic bright spot in today's gloomy prognostications came with the announcement that Boehner has summoned House members back for votes on Sunday evening, instructing that they may be needed for votes through Jan. 2 to deal with the impending crisis.

Related: Boehner calls House back to Washington on Sunday

But without a possible deal to vote on, their mere presence may be mostly for theatrical purposes, as both sides seek to divert voters' ire away from their party if they are hit with the fiscal cliff's automatic tax increases.

Boehner, for his part, insisted to fellow House Republicans that the Senate must act first after his caucus failed to pass a 'Plan B' measure that would have hiked tax rates for earners making over $1 million annually.

Susan Walsh / AP

Senate Minority Leader Mitch McConnell, House Speaker John Boehner, and Senate Majority Leader Harry Reid during a ceremony for the late Sen. Daniel Inouye in Washington on Thursday, Dec. 20.

"We've done our job, it's up to the Senate to act," Boehner told Republican House members on a conference call today, according to a participant. "We'll see if they do anything."

With prospects for a last-minute deal looking bleak, attention has turned to what impact a tumble over the fiscal cliff would have.

While some financial pains would be felt right away -- and the markets would likely react sharply -- many of the longer-term tax rate changes and spending cuts triggered by the cliff would be reversible if a deal is reached early next year.

Recommended: What happens if we go over the cliff?

But that may well end up being the job of the 113th Congress, which convenes for the first day on Jan. 3.

The House of Representatives will reconvene on Sunday evening, just less than 30 hours before the United States reaches the fiscal cliff.

House Speaker John Boehner, R-Ohio, notified lawmakers that the House would come to order at 6:30 p.m. ET on Sunday in hopes of averting the end-of-year combination of tax hikes and spending cuts that constitute the fiscal cliff.

In briefing fellow Republicans on Thursday afternoon, Boehner re-iterated what he's said publicly the past few days. The top House Republican said the Senate must act first to send a bill to the House. (Senate Democratic leaders are insisting that the House pass a Senate bill that would preserve income tax rates on those earning less than $250,000 per year.)

"We've done our job, it's up to the Senate to act," Boehner told members, according to a lawmaker on the call. "We'll see if they do anything."

Related: What happens if we go over the cliff?

Whether any final deal could emerge in the waning hours before the Dec. 31 deadline was less clear. There were rumblings of a meeting on Friday between President Barack Obama and leaders in Congress. (A senior administration official told NBC's Kristen Welker that no such meeting had been set up.) And the White House shot down Republican-fueled indications that the Obama administration had made a new entreaty to the GOP in hopes of averting the fiscal cliff. 

Obama called congressional leaders on Wednesday evening before departing Hawaii to return to Washington, initiating conversations that fell largely dormant during the Christmas holiday this past weekend. 

Among the complicating details include the ideological split in both parties that might force relative moderates from both parties to join forces to advance any final deal. 

The lawmaker on Thursday's call told NBC News that any Senate plan Boehner puts on the House floor (of which there is no guarantee) would only receive as few as 40 Republican votes, making Democratic help necessary.

"If the Senate will not approve these bills and send them to the president to be signed into law in their current form, they must be amended and returned to the House," Boehner told Republicans Thursday, according to a source on the call. "Once this has occurred, the House will then consider whether to accept the bills as amended, or to send them back to the Senate with additional amendments. The House will take this action on whatever the Senate can pass -- but the Senate must act." 

J. Scott Applewhite / AP

Speaker of the House John Boehner, R-Ohio, left, joined by House Majority Leader Eric Cantor, R-Va., returns to his office after speaking to reporters on the fiscal cliff negotiations, at the Capitol in Washington, Friday, Dec. 21, 2012.

With a ride on Air Force One already under his belt, the newest member of the United States Senate took his oath of office Thursday, less than 24 hours after the governor of his home state announced he'd be tapped for the job.

Sen. Brian Schatz, D-Hawaii, who replaces the late Sen. Daniel Inouye, was sworn in by Vice President Joe Biden at 2:36pm ET.

Schatz most recently served as the state's lieutenant governor and previously led Hawaii's Democratic party. Gov. Neil Abercrombie picked his 40 year-old deputy over Rep. Colleen Hanabusa, who was Inouye's choice to be his successor.

With Senate Majority Leader Harry Reid eager to assemble every Democratic vote possible as the "fiscal cliff" approaches, Schatz rushed to Washington after his appointment was announced yesterday. He hitched a ride with President Barack Obama, who cut his Hawaii vacation short to return home for work on a potential deal to avert the automatic spending cuts and tax increases slated for January 1.

"It was a lovely flight," Schatz said upon his arrival, according to a pool report. "I slept almost the whole way."

Schatz said he was informed of his appointment to the seat yesterday at about 1 p.m. and that he didn't know he would be riding on Air Force One until later in the day. His family flew commercially to be present for the swearing-in.

The scramble also included a hasty purchase of a heavy overcoat for the transition to the chilly D.C. climate.

"I bought this coat yesterday," he told reporters, gesturing to his new outerwear.

As others have pointed out, the so-called fiscal cliff maybe isn't the best metaphor to use in describing the current debate over the looming tax increases and spending cuts set to take place in the new year.

After all, when you jump off a cliff, you usually don't live to tell about it.

But that isn't necessarily the case in this debate. If tax rates go up and spending cuts go into effect after Dec. 31, Congress always has the ability to fix things retroactively at a later date.

Perhaps a better metaphor to use is the deadline for midterm paper -- you might fail your class or flunk out of school if you don't complete the paper on time, or you could successfully negotiate to turn it in a later date, or you could do other things to boost your grades and standing in school.

Another metaphor is the deadline for a collective-bargaining agreement in professional sports -- having the contract expire could mean the end to the football or hockey season, or the principals could eventually reach a deal (even if that means a shortened season).

So what happens -- and what doesn't -- if Congress, as it increasingly appears, fails to reach a fiscal deal before the new year?

On Christmas, the New York Times ran a good summary:

Some hits — like a two percentage point increase in payroll taxes and the end of unemployment benefits for more than two million jobless Americans — would be felt right away. But other effects, like tens of billions in automatic spending cuts, to include both military and other programs, would be spread out between now and the end of the 2013 fiscal year in September. These could quickly be reversed if a compromise is found.

Similarly, the expiration of Bush-era tax cuts on Jan. 1 would not have a major impact on consumers if Congress quickly agreed to extend them for all but the wealthiest Americans in early 2013, as is widely expected.

Other probable changes, like a jump in taxes on capital gains and dividends, would most likely be felt over a broader period rather than as an immediate blow to the economy.

So the world doesn't come to an end on Jan. 2 or Jan. 3. But the question will turn to: What does Congress and the Obama White House do to fix things and limit the damage?

Editor’s note: Over the next few days, First Read will be recapping the year in politics. Yesterday, we looked at the Top 10 political events of 2012. Today: the year in politics – in quotes.  "

JANUARY
Mitt Romney: “I like being able to fire people who provide services to me.” (Jan. 9)

Rick Perry: “There is a real difference between a venture capitalist and a vulture capitalist.” (Jan. 10)

Gingrich: “No… [applause], but I will. I think the destructive, negative, vicious nature of much of the news media makes it harder to govern this country, harder to attract decent people to run for public office, and I am appalled that you would begin a presidential debate on a topic like that.” -- Asked during a CNN debate if he’d like to respond to allegations by an ex-wife that he wanted an open marriage. (Jan. 19)

Gingrich: “By the end of my second term, we will have the first permanent base on the moon, and it will be American.” (Jan. 25)

FEBRUARY
Romney: “I’m not concerned about the very poor.” (Feb. 1)

Romney: “There are some things that you just can’t imagine happening in your life.  Uh, this is one of them.” [Laughter] – on Donald Trump’s endorsement. (Feb. 2)

Romney: “I was a severely conservative Republican governor.” (Feb. 10)

Foster Friess (Santorum supporter): “You know, back in my days, they used Bayer aspirin for contraception. The gals put it between their knees, and it wasn’t that costly.” (Feb. 16)

Romney: “It seems right here, the trees are the right height. I like seeing the lakes. I love the lakes.” (Feb. 17)

Romney: “Ann drives a couple of Cadillacs actually.” (Feb. 24)

Rick Santorum: “President Obama once said he wants everybody in America to go to college. What a snob!” (Feb. 25)

Romney: “I have some friends who are NASCAR team owners.” (Feb. 26)

Romney: “I like those fancy raincoats you bought, really sprung for the big bucks.” (Feb. 26)

MARCH
Romney: “The best thing I can do for you is to tell you to shop around.” (March 5)

Romney: “I’ve got a lot of good friends — the owner of the Miami Dolphins and the New York Jets — both owners are friends of mine.” (March 12)

Eric Fehrnstrom (Romney adviser): “Everything changes. It’s almost like an Etch A Sketch. You can kind of shake it up and restart all over again.” (March 21)

Romney: "Russia, this is, without question, our number one geopolitical foe.” (March 26)

President Barack Obama:  “This is my last election. After my election I have more flexibility.” – to Russian President Medvedev. (March 26)

APRIL
Ann Romney: “Well, you know, I guess we better unzip him and let the real Mitt Romney out because he is not!” – Asked by a radio host about the criticism that her husband “comes off stiff.” (April 2)

Hilary Rosen (Democratic strategist): “Guess what? His wife has actually never worked a day in her life.” (April 11)

Romney: “I’m not sure about these cookies. They don’t look like you made them. Did you make them? You didn’t, did you? They came from the local 7-11, bakery, or wherever.” (April 17)

Biden: “I promise you, the president has a big stick. I promise you.” (April 2012)

MAY
Ann Romney: “Stiff, he’s not, he’s funny… There’s a wild and crazy man inside there.” (May 1)

Vice President Joe Biden: “I am absolutely comfortable with the fact that men marrying men, women marrying women, and heterosexual men and women marrying another are entitled to the same exact rights, all the civil rights, all the civil liberties." (May 9 on Meet the Press)

Obama: “He probably got out a little bit over his skis, but out of generosity of spirit. … Would I have preferred to have done this in my own way, in my own terms, without, I think, there being a lot of notice of everybody? Of course. But all's well that ends well." (May 10)

JUNE
Romney: "I met a guy yesterday, seven feet tall. Yeah, handsome, great big guy, seven feet tall! Name is Rick Miller—Portland, Oregon. And he started a business. Of course you know it was in basketball. But it wasn't in basketball! I mean, I, figured he had to be in sport, but he wasn't in sport." (June 6)

Obama: “The private sector is doing fine.” (June 8)

Obama: “The highest Court in the land has now spoken. We will continue to implement this law. And we'll work together to improve on it where we can. But what we won’t do -- what the country can’t afford to do -- is refight the political battles of two years ago, or go back to the way things were.” – on the health-care law being upheld, 5-4, by the Supreme Court with Chief Justice Roberts being the deciding vote. (June 28)

JULY
Romney: “Lemon. Wet. Good.” -- asked how his lemonade was. (July 4)

House Speaker Boehner: “The American people probably aren’t going to fall in love with Mitt Romney.” (July 7)

Obama: “If you’ve got a business – you didn’t build that. Somebody else made that happen.” (July 14)

Romney: “There are a few things that were disconcerting.” – Romney on the London Olympics security preparations. (July 26)

David Cameron: “Of course it’s easier if you hold an Olympic games in the middle of nowhere.” (July 26)

Romney: “Culture makes all the difference. Culture makes all the difference.” – on why the Palestinian economy is worse than Israel’s. (July 30)

AUGUST
Romney: “I’m not a business.” – on why he’s not releasing his taxes. (Aug. 9)

Romney: “Join me in welcoming the next president of the United States, Paul Ryan." – introducing Ryan as his vice presidential pick. Romney came back on stage: "Every now and then I'm known to make a mistake. I did not make a mistake with this guy. But I can tell you this. He's going to be the next vice president of the United States." (Aug. 11)

Paul Ryan: "I got a new bow last year. … Oh, I got a new chainsaw. It was nice. It's a Stihl." -- asked by People magazine what his last splurge was. (Aug. 12)

Biden: "They gonna put y’all back in chains." (Aug. 14)

Romney: “The fascination with taxes I paid I find to be very small minded.” – at a news conference he arranged on Medicare using a white board. (Aug. 16)

Todd Akin: “If it’s a legitimate rape, the female body has ways to try to shut that whole thing down.” (Aug. 19)

Ryan: “I’m a Catholic deer hunter. I am happy to be clinging to my guns and to my religion.” (Aug. 21)

Biden: “I’ve got a little bumper sticker for you: Osama bin Laden is dead and General Motors is alive.” (Aug. 21)

Ann Romney: “I love you womeeen!!!!” (Aug. 28)

Ann Romney: “Tonight, I want to talk to you about love.” (Aug. 28)

Chris Christie: “Tonight, we’re going to choose respect over love.” (Aug. 28)

Neil Newhouse (Romney pollster): “We’re not going to let our campaign be dictated by fact-checkers.” (Aug. 28)

Romney: “Four years from the excitement of the last election, for the first time, the majority of Americans now doubt that our children will have a better future. It is not what we were promised.” – Romney acceptance speech. (Aug. 30)

Clint Eastwood: “What? What do you want me to tell Romney? I can't tell him to do that. That. He can't do that to himself.” (Aug. 30)

SEPTEMBER
Bill Clinton:  “Listen to me, now. No president — no president, not me, not any of my predecessors, no one could have fully repaired all the damage that he found in just four years.” And: “It takes some brass to attack a guy for doing what you did.” – DNC convention speech. (Sept. 5)

Jennifer Granholm: “Well, in Romney's world, the cars get the elevator; the workers get the shaft.” (Sept. 5)

Obama: “America, I never said this journey would be easy, and I won't promise that now. Yes, our path is harder, but it leads to a better place.” – convention speech (Sept. 6)

Romney: “It’s disgraceful that the Obama administration’s first response was not to condemn attacks on our diplomatic missions, but to sympathize with those who waged the attacks.” (Sept. 12)

Romney: “I think the best answer is as little as possible.” -- when asked what he wears to bed at night. (Sept. 14)

Romney: “Middle income is $200… 250,000 or less.” (Sept. 14)

Romney: “There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it.” (Sept. 17 – when the video was first unveiled)

Benjamin Netanyahu: “Where should a red line be drawn? A red line should be drawn right here.” – speaking before the U.N. talking about Iran’s capability for a nuclear weapon and using a red marker to draw a red line on a diagram of a bomb. (Sept. 27)

OCTOBER
Romney: “And congratulations to you, Mr. President, on your anniversary. I’m sure this was the most romantic place you could imagine — here with me!” -- first presidential debate. (Oct. 3)

Romney: “Look, I’ve got five boys. I’m used to people saying something that’s not always true, but just keep on repeating it and ultimately hoping I will believe it.” – first presidential debate. (Oct. 3)

Romney: “I like PBS, I love Big Bird. I actually like you, too.” -- to moderator Jim Lehrer of PBS in the first presidential debate. (Oct. 3)

Obama: “Well, Jim, I want to thank you, and I want to thank Governor Romney, because I think was a terrific debate.” (Oct. 3)

Biden: “With all due respect, that's a bunch of malarkey.” (Oct. 11)

Brad Sherman: “Do you want to get into this?” -- to fellow Democrat Howard Berman with whom he was competing for a redistricted congressional seat. (Oct. 11)

Romney: “I went to a number of women’s groups and said: ‘Can you help us find folks,’ and they brought us whole binders full of women.” (Oct. 16)

Obama: “Please proceed, governor.” (Oct. 16)

Tagg Romney: “You want to jump out of your seat and rush down to the debate stage and take a swing at him.” – said of President Obama after a debate in which the two candidates exchanged verbal barbs and got in each other’s space. (Oct. 18)

Obama: “Obviously, I had an off-night.” – to Jon Stewart in reference to his first debate performance. (Oct. 19)

Obama: “Well, governor, we also have fewer horses and bayonets.” (Oct. 22)

Richard Mourdock: “Life is that gift from God. And even when life begins in that horrible situation of rape, that it is something that God intended to happen.” (Oct. 23)

Obama: “If you say you love American cars in the debate, but you wrote an article called ‘Let Detroit Go Bankrupt,’ you might have Romnesia.” (Oct. 23)

Obama: “The second thing I'm confident we'll get done next year is immigration reform. And since this is off the record, I will just be very blunt. Should I win a second term, a big reason I will win a second term is because the Republican nominee and the Republican Party have so alienated the fastest-growing demographic group in the country, the Latino community.” (Oct. 24)

Romney: “The President's campaign has a slogan: it is ‘forward.’ But to the 23 million Americans struggling to find a good job, these last four years feel a lot more like ‘backward.’ We cannot afford four more years like the last four years." – Romney economic speech (Oct. 26)

Christie: “The president has been all over this and he deserves great credit” – on the response to Hurricane Sandy (Oct. 31)

NOVEMBER
Obama: “Don't boo. Vote! Voting is the best revenge.” (Nov. 4)

Romney: “I pray that the president will be successful in guiding our nation.” – Romney concession speech (Nov. 6-7)

Obama: “Tonight, in this election, you, the American people, reminded us that while our road has been hard, while our journey has been long, we have picked ourselves up, we have fought our way back, and we know in our hearts that for the United States of America the best is yet to come.” – Obama victory speech (Nov.6-7)

Romney: “The president’s campaign focused on giving targeted groups a big gift — so he made a big effort on small things. … You can imagine for somebody making $25,000 or $30,000 or $35,000 a year, being told you’re now going to get free health care, particularly if you don’t have it, getting free health care worth, what, $10,000 per family, in perpetuity, I mean, this is huge.” (Nov. 14)

Stu Stevens: “[H]e was a charismatic African American president with a billion dollars, no primary and media that often felt morally conflicted about being critical.” (Nov. 28)

DECEMBER
Tagg Romney: “He [Mitt Romney] wanted to be president less than anyone I’ve met in my life. He had no desire to . . . run.” (Dec. 22)

Updated 2:48 p.m. - The Senate’s top Democrat said Thursday that he was pessimistic that Washington could avoid the impending fiscal cliff, accusing House Speaker John Boehner, R-Ohio, of running the lower chamber as a “dictatorship.”

Senate Majority Leader Harry Reid, D-Nev., said he was unsure there was enough time between now and the end of the year to reach a deal to avoid the combination of spending cuts and tax hikes set to take effect on Jan. 1. Reid said “the only viable escape route” was for the GOP-controlled House to give its approval to a Senate bill that would preserve existing tax rates on income under $250,000.

“Everyone knows that if they had brought up the Senate-passed bill, it would pass overwhelmingly. But the speaker says, no we can't do that,” Reid said on the Senate floor this morning. “It's [the House] being operated by a dictatorship of the speaker.”

In response, a spokesman for Boehner said in a statement,  "Senator Reid should talk less and legislate more. The House has already passed legislation to avoid the entire fiscal cliff.  Senate Democrats have not."

Recommended: The Top 10 political events of 2012

Reid’s remarks suggest there has been no thaw in the stalemate that has plagued Washington for weeks, as consensus continues to elude Republicans and Democrats on averting the fiscal cliff. Amid the standoff, President Barack Obama called Reid and  Boehner (along with House Democratic Leader Nancy Pelosi and Senate GOP Leader Mitch McConnell) late Wednesday from Hawaii. The president traveled back to the White House on Thursday following his brief family vacation.

"The leader is happy to review what the president has in mind, but to date, the Senate Democrat majority has not put forward a plan," said a spokesman for McConnell. "When they do, members on both sides of the aisle will review the legislation and make decisions on how best to proceed."

The discord almost gave way to an agreement on Thursday, as outgoing Massachusetts Sen. Scott Brown, R, posted on social media that he was rushing back to Washington to mull over a new offer Obama had made to Senate Republicans. Alas, those were false hopes; the administration and Senate Democrats flatly denied that they had made any new offer, and said that no agreement was imminent.

Both parties departed Washington on poor terms, a political chasm widened last week by Boehner’s unsuccessful pitch of “Plan B” legislation meant to extend tax rates on income under $1 million. Obama had vowed to veto it, and Boehner’s backup plan was generally regarded as more of a negotiating ploy than a comprehensive solution to the impending fiscal cliff. Nonetheless, conservatives balked at the speaker’s plan, laying bare Boehner’s ability to rally most Republicans behind any deal that even hinted at raising taxes.

And just five days before the onset of the fiscal cliff, Washington was locked in little more than a staring match between the House and Senate.

Republican leaders said in a joint statement on Wednesday that the Senate must amend Republican-passed legislation and return it to the House before any steps can be taken.

“The House will take this action on whatever the Senate can pass, but the Senate first must act,” the GOP leaders said.

But Reid said that arcane Senate rules prevented him from bringing up anything new for a vote. Republican leaders argue that the Senate bill also faces procedural flaws which would prevent it from consideration in the House; Democrats assert that the excuse is nonsense.

In the meantime, it appears that Thursday might be a lost day for negotiations. Obama landed in Washington around midday, but most House members remain in their districts. But Republican leaders notified their rank-and-file members that the House would be in session at 6:30 p.m. on Sunday, and remain so for the remainder of the year. The Senate is in session on Thursday, but is concentrating on other unfinished business from this year.

The absence of the House, though, prompted Reid to lay into Republicans and fret that a fiscal cliff failure was all but inevitable.

“If we go over the cliff, and it looks like that's where we're headed, Mr. President – the House of Representatives as we speak with four days left after today before the first year aren't here with the speaker telling him he'll give them 48 hours’ notice," he said. "I can't imagine their consciences – they're out wherever they are around the country and we're here trying to get something done."

Mary F. Calvert / Reuters

The U.S. Capitol building is pictured as lawmakers return from the Christmas recess in Washington Dec. 27, 2012.

Amid the standoff, each party was left bracing for the potential political fallout associated with a fiscal cliff failure.

The bleak atmosphere in Washington appeared to be extending across the country, for instance. A Gallup poll conducted Dec. 21-22 – as lawmakers left the Capitol for the Christmas holiday with no deal in hand – found that optimism in leaders’ ability to reach a deal had declined; just 50 percent viewed a deal as somewhat or very likely, versus 48 percent who said a fiscal cliff agreement was not too or very unlikely.

And as Congress and the administration appears set to do anything but, 68 percent of Americans said they thought the principal actors should compromise, versus sticking rigidly to their ideological guideposts.

Lisa Jackson is stepping down from her post as the administrator of the Environmental Protection Agency after a four-year term.

"I will leave the EPA confident the ship is sailing in the right direction, and ready in my own life for new challenges, time with my family and new opportunities to make a difference," she said in a statement announcing her departure.

Kevin Wolf / AP

This file photo shows Environmental Protection Agency Administrator Lisa Jackson during an interview with The Associated Press at EPA Headquarters in Washington. Jackson, The Obama administration's chief environmental watchdog, is stepping down after a nearly four-year tenure marked by high-profile brawls over global warming pollution, the Keystone XL oil pipeline, new controls on coal-fired plants and several other hot-button issues that affect the nation's economy and people's health.

Jackson, 50, is expected to depart the E.P.A. early next year. She is the first African-American to head the agency.

Her tenure at the helm of the E.P.A. was marked by clashes with some in the GOP and the energy industry who said environmental regulations limited job creation and hurt new innovation. The administration abandoned an attempt early in President Barack Obama's first term to pass cap-and-trade legislation to address global climate change. That legislation failed to pass the Senate, and the E.P.A. moved instead on a series of regulatory efforts including successful implementation of emissions standards for new cars and small trucks.

"I want to thank President Obama for the honor he bestowed on me and the confidence he placed in me four years ago this month when he announced my nomination as Administrator of the Environmental Protection Agency," she said in her statement, which indicated she will leave the cabinet after the State of the Union address. "At the time I spoke about the need to address climate change, but also said: 'There is much more on the agenda: air pollution, toxic chemicals and children’s health issues, redevelopment and waste-site cleanup issues, and justice for the communities who bear disproportionate risk.'"

Saying that Jackson has been "an important part of my team," Obama praised those efforts in a statement.

"Under her leadership, the EPA has taken sensible and important steps to protect the air we breathe and the water we drink, including implementing the first national standard for harmful mercury pollution, taking important action to combat climate change under the Clean Air Act and playing a key role in establishing historic fuel economy standards that will save the average American family thousands of dollars at the pump, while also slashing carbon pollution."

In an interview with the New York Times, Jackson said she intends to "decompress" and do public speaking engagements but does not yet have plans for a new job.

Ricky Li / Ricky Li

Hawaii Gov. Neil Abercrombie named his lieutenant governor, Brian Schatz, to fill the Senate seat left vacant following the death of the late Sen. Daniel Inouye (D).

Abercrombie, a Democrat, chose Schatz from a list of three finalists forwarded to him by the state Democratic party. Inouye, who served almost 50 full years in the Senate, died on Dec. 17.

"No one can fill Sen. Daniel K. Inouye's shoes, but together, we can all try to follow in his footsteps," Schatz said in a press conference in Hawaii.

Schatz, flying to Washington with President Obama aboard Air Force One, Tweeted that he was eager to support the president's agenda. The president was returning early from a Christmas break in Hawaii. 

The other finalists for the position included Rep. Colleen Hanabusa, whom Inouye had preferred as his successor, and Esther Kiaaina, the deputy director of the state's Department of Land and Natural Resources.

"Senator Inouye conveyed his final wish to Governor Abercrombie," Jennifer Sabas, Inouye's chief of staff, said in a statement. "While we are very disappointed that it was not honored, it was the Governor's decision to make."

Abercrombie said Inouye's views and wishes weighed on his decision-making process, but "no one and nothing is preordained." He said the possibility of a special election to fill Hanabusa's seat weighed on him in choosing Inouye's successor.

"Sometimes you have to set aside personal considerations in order to look for the good of the whole," the governor, a former congressman, said at a press conference.

Senate Majority Leader Harry Reid's office said Schatz would be sworn in to office on Thursday afternoon or early evening, NBC's Kelly O'Donnell reported. The Senate reconvenes on Thursday to take up the urgent business of reaching a deal to avoid the "fiscal cliff" on Jan. 1.