The possibility that Washington will be ringing in the new year with a tax hike on millions of Americans grew substantially over the last few days, as lawmakers fled the Capitol for the holidays without having sealed a deal to avert the looming fiscal crisis.
Factoring in time off for Christmas, they have less than a week to agree to a solution. But while hope for an agreement is fading, Congress typically resolves its crises when bumping up against a hard deadline.
Here are some of the scenarios for how Washington could address the wave of tax hikes and spending cuts set to hit next week:
Lawmakers on Sunday began to talk about the possibility of a scaled-down package. In this scenario, Congress could basically give President Obama what he wants on taxes — a bill that extends current rates for those making under $250,000, while allowing taxes to rise for top earners. Or they could choose a different threshold.