Senate Minority Leader Mitch McConnell (R-KY) and Vice President Joe Biden have reportedly reached an agreement that would solve the tax side of the debate over the so-called “fiscal cliff,” the package of tax increases and spending cuts that will begin automatically at midnight tonight.

Senate Majority Leader Harry Reid (D-NV) and the Democratic caucus have not yet indicated support for the compromise, which extends most of the Bush tax cuts and other tax provisions, and while the Senate may vote tonight, no vote is expected in the House before tonight’s deadline. Here is a breakdown of the different provisions of the reported compromise:

Bush tax cuts: The deal would extend all of the Bush tax cuts for incomes below $400,000 for individuals and $450,000 for families, while reinstating the Clinton-era 39.6 percent tax rate for income above those thresholds. It will also push the capital gains rate on investment income back to 20 percent for income above $400,000 for individuals and $450,000 for families. President Obama had asked for an extension of rates only for incomes below $250,000.

Stimulus tax credits: Three tax credits expanded as part of the stimulus will be extended for one year as part of the compromise. The America’s Opportunity Tax Credit, Child Tax Credit, and Earned Income Tax Credit collectively benefit nearly 20 million Americans each year, and extending them was a priority for Obama and Democrats. Republicans allowed all three to expire in tax legislation earlier this year.

Payroll tax cut: The payroll tax cut would expire as part of this compromise. The payroll tax cut, which benefits all wage-earning workers, is the most damaging piece of the “fiscal cliff” according to the Congressional Budget Office. Republicans have opposed extending the payroll tax cut in the past; many Democrats opposed its extension over fears that it would undermine Social Security, which it helps fund.

Unemployment insurance: The federal unemployment insurance program would be extended for one year under this deal. Without an extension, more than 2 million would lose benefits at the beginning of 2013, while another million would lose them in the early part of the year.

Estate tax: The estate tax was set to revert to its Clinton-era levels, where it was taxed at 55 percent after a $1 million exemption. This deal would set the exemption at $5 million and tax at a 40 percent rate after that — at a cost of $375 billion over 10 years compared to the Clinton level.

Other provisions: The deal would also include a permanent fix to the Alternative Minimum Tax and a one-year “doc fix,” which would prevent cuts in provider payments through Medicare. It also extends certain corporate tax provisions for another year.

The reported McConnell-Biden compromise does not deal with the spending cuts side of the fiscal cliff, though CNN’s Dana Bash reported that the sequester may simply be delayed for two months. The spending cuts are the part of the fiscal cliff that the Congressional Budget Office says would be the most damaging to America’s economic growth. It also does not include an increase in the debt ceiling, setting up another fight over the coming months like the one that created the fiscal cliff in the first place.

Sen. Dianne Feinstein (D-CA) urged lawmakers to embrace a package that could avert the so-called fiscal cliff, noting that 2.1 million Americans have already lost federal unemployment benefits as a result of Congressional inaction. “From this point on, it is lose-lose,” Feinstein explained, during an appearance on Fox News Sunday. “My big worry, is, a contraction of the economy. The loss of jobs, which could be well over 2 million in addition to the people already on unemployment.”

Indeed, the National Employment Law Project, a worker advocacy group, projects that “more than 2 million Americans will stop receiving benefits after Dec. 29, when the federal Emergency Unemployment Compensation program will cease to exist.” The benefits have kept 2.3 million out of poverty last year alone, and the Congressional Budget Office projects that a full, year-long extension would lead to the creation of 300,000 new jobs.

The initiative requires recipients to search for a job while receiving payments, and one study found that unemployment recipients search harder for jobs than those who are not receiving money from the program.

Earlier this week, Senate Minority Leader Mitch McConnell (R-KY) demanded spending cuts to pay for the program, which would cost $30 billion. Democrats have been pushing for a full extension of benefits.

Although official Washington is currently fixated on the so-called “Fiscal Cliff,” the biggest threat to American prosperity is the debt ceiling, which must be raised in February to prevent economic catastrophe. If Republicans refuse to reach a deal on the so-called cliff, the Congressional Budget Office predicts that they will spark a new recession in 2013. But if Republicans block action on the debt ceiling, they will make that potential recession look quaint. Without raising the debt ceiling, the United States will be forced to embrace austerity so severe it will lead to “a bigger GDP drop than that experienced during the Great Recession of 2008.”

But in an interview on Fox News Sunday this morning, Sen. Lindsey Graham (R-SC) threatened to oppose this must-pass bill unless Social Security benefits are taken away from millions of future retirees:

I’m not going to raise the debt ceiling unless we get serious about keeping the country from becoming Greece, saving Social Security and Medicare [sic]. So here’s what i would like: meaningful entitlement reform — not to turn Social Security into private accounts, not to take a voucher approach to Medicare — but, adjust the age for Social Security, CPI changes and means testing and look beyond the ten-year window. I cannot in good conscience raise the debt ceiling without addressing the long term debt problems of this country and I will not.

Watch it:

This is extortion, plain and simple. It is the budgetary equivalent of threatening to break America’s legs unless Congress agrees to break the backs of millions poised on the edge of retirement. Graham’s position is that seniors should have to wait longer for their retirement benefits — even if they work in physically demanding jobs that literally tear the body apart by the time a worker reaches age 65 — and that those benefits should be reduced in the future.

And if Congress won’t agree to this deal, then Graham is prepared to thrust the nation into an economic calamity unheard of since the Great Depression.

Two Republican senators want to use the threat of an economic meltdown to raise the retirement age and cut Medicare. Sens. Bob Corker (R-TN) and Lamar Alexander (R-TN) introduced a plan today that would raise the federal debt limit by $1 trillion in exchange for $1 trillion in cuts to Medicare, Medicaid, and Social Security, as The Hill reported:

The Corker-Alexander dollar-for-dollar plan has several components.

It would structurally reform Medicare by creating competing private options giving seniors greater choice of healthcare plans. It would not, however, cap Medicare spending.

The plan would also give states more flexibility to manage Medicaid programs and prevent states from “gaming the federal share of the program with state tax charges.”

It would gradually raise the Social Security retirement age and use the “chained CPI” formula to calculate cost-of-living adjustments, curbing the growing cost of benefits.

In exchange, it would direct the debt limit be increased by the same amount as the savings generated from entitlement reform.

The U.S. will hit its debt limit on or around December 31st. The Treasury Department estimates that, using extraordinary measures, it could avoid default for another two months or so. Allowing the U.S. to default on its debt via not raising the debt ceiling could cause a complete financial meltdown. The 2011 debt ceiling debacle — during which House Republicans nearly pushed the country into a default due to their intransigence on taxes — cost the country about $19 billion in higher interest payments and at least one million jobs.

Corker and Alexander are threatening more economic chaos in order to achieve one of the most regressive potential policy changes. Though lawmakers point to America’s increasing life expectancy in order to justify raising the retirement age, life expectancy is only increasing for wealthier workers in non-physical jobs. As the Center for Economic and Policy Research put it, “there has been a sharp rise in inequality in life expectancy by income over the last three decades that mirrors the growth in inequality in income.”

On Friday morning, outgoing Sen. Olympia Snowe (R-ME) attributed the GOP’s reluctance to reach a balanced deal that could avert the so-called fiscal cliff to Grover Norquist’s pledge, which prevents Republicans from supporting a tax increase. President Obama has called on lawmakers to pass a package that maintains the Bush tax cuts for families earning less than $250,000 a year, though Republicans have thus far ignored his call and unsuccessfully attempted to advance a much more modest measure that preserved tax breaks for incomes under a million dollars.

Appearing on CNN’s Starting Point, Snowe — who backs a deal that would maintain current tax rates for families earning $400,000 and less — called on Republicans and Democrats to compromise, but noted that the no-tax pledge may be holding them back:

ALI VELSHI (HOST): Talk to me about this. I certainly don’t want to demonize people who ideologically believe taxes shouldn’t go up on anyone or don’t want taxes to go up because they think it’s damaging to the economy. I think there are a lot of Americans who are quite prepared to demonize people who will not change their view or cast a vote because it offends Grover Norquist. What role do the pledges play in our inability to compromise?

SNOWE: Well, I’m certain it does play a role. I’ve never signed these pledges because my obligation to the people who elected me and that’s the way it should be for each member of Congress, because times change. The circumstances change, you have to address the issue at hand. It is important to have extending the tax cuts for especially the middle income but secondly to put spending cuts on the table.

Watch it:

With four days left until the end of the year, President Obama will host the congressional leaders in the Oval Office today in hopes of reaching a compromise. The House and Senate are back in session, but House Speaker John Boehner (R-OH) refuses to take an up or down vote on a Senate-passed bill extending tax cuts to Americans earning less than $250,000 and Senate Minority Leader Mitch McConnell (R-KY) is now demanding spending cuts to pay for an extension to the federal unemployment insurance program that expires at the end of the year. The Washington Post reports that McConnell “for the first time was engaged directly in talks with the White House. He signaled an interest in cutting a deal.”

Yet Norquist is still urging lawmakers to stand by his hardline position, tweeting, “We had an election Boehner was elected speaker. Now lame duck obama should get over it (Also 30 GOP governors).”

Unless a deal is reached with management, some 14,000 East Coast port workers plan to go on strike on Sunday, affecting ports from Boston to Miami. Here’s what you need to know about the impending strike:

1) Management wants to cut workers’ pay. The largest sticking point in the negotiations between the port workers and a coalition of companies known as the United States Maritime Alliance (USMX) is a payment to workers for each container they unload. Instituted in the 1960s, the payments are meant as compensation for the mechanization of America’s ports, which allows one worker today to do what used to take three workers. As the New York Times explained, “The companies want to freeze those payments for current longshoremen and eliminate them for future hires.” The companies also want to cut future raises for workers to below the rate of inflation.

2) Port workers are highly skilled. The companies claim that workers are paid too much, rendering east coast ports uncompetitive. But the workers — whose numbers have dropped from 35,000 to 3,500 due to automation — are highly trained and “cannot be easily replaced.” They also do not work consistent hours. According to the union, “longshore labor cost amounts to between 3% and 4% of the shipper’s total cost.”

3) The economic impact could be significant…or not. As Brad Plumer explained in the Washington Post, it’s hard to figure out the economic impact of port closures. Estimates place the impact of a 2002 West Coast port closure at $1 billion per day, but the cost may have actually been far less than that.

4) Businesses are using political pressure to entice workers to cave. Business leaders and right-wing governors are urging the White House to invoke special powers to end the strike, should workers walk out. President Obama, for his part, urged the two sides to forge an agreement “as quickly as possible.”

The strike would be the first at East Coast ports since 1977.

House Speaker John Boehner (R-OH) yesterday punted negotiations over how to avert the so-called “fiscal cliff” back to the Senate, but in that chamber, Minority Leader Mitch McConnell (R-KY) is now demanding spending cuts to pay for an extension to the federal unemployment insurance program that expires at the end of the year.

Without an extension, 2 million Americans will lose unemployment insurance on January 1; another million will fall out of the program in the early months of 2013. But with the Senate rushing to act before the end of the year, McConnell is again asking for spending cuts to offset the program’s extension, the Associated Press reports:

For the Senate to act, it would require a commitment from Senate Republican Leader Mitch McConnell not to demand a 60-vote margin to consider the legislation on the Senate floor. McConnell’s office says it’s too early to make such an assessment because Obama’s plan is unclear on whether extended benefits for the unemployed would be paid for with cuts in other programs or on how it would deal with an expiring estate tax, among other issues.

More than 500,000 have already lost unemployment insurance because Congress restricted eligibility the last time the program expired, and America’s unemployment program is one of the world’s stingiest. Still, it kept 2.3 million out of poverty last year alone, and the Congressional Budget Office projects that a full, year-long extension would lead to the creation of 300,000 new jobs.

Opponents of the federal unemployment program, which George W. Bush signed into law in 2008 (unemployment insurance is generally handled by states), have argued that it creates a culture of dependency and laziness. But the federal program requires recipients to search for a job while receiving payments, and one study showed that people on unemployment search harder for jobs than those who are not receiving money from the program.

President Obama announced on Friday that he had spoken to House Speaker John Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV) since the failure of the GOP’s so-called Plan B and “offered to compromise with Republicans in Congress” in the ongoing negotiations to avert the so-called fiscal cliff.

Obama said he is “ready and willing” to get “a comprehensive package done” of revenue increases in spending cuts “all at once” or in “several different steps” and reiterated that the final product will “need support from Democrats and Republicans.”

“Nobody gets 100 percent of what they want everyone has to give in a sensible way,” Obama said at least twice. He stressed that taxes will go up on all Americans unless Congress reaches a deal before Jan. 1 and called on lawmakers to pass legislation preserving lower rates for 98 percent of Americans. On Thursday, however, Republicans in the House refused to support a measure that increased taxes on Americans earning more than $1 million, even though it included a separate bill of spending cuts. Obama has called on preserving tax reductions for couples earning less than $250,000, but has increased the threshold to $400,000 in negotiations.

Lawmakers, Obama said, should “cool off, drink some egg nog, have Christmas cookies, sing some carols” and then return to Washington after Christmas and “work out a deal.” “We move forward together or we don’t move forward at all,” he insisted.

On Thursday night, House Speaker John Boehner (R-OH) tried and failed to pass his so-called Plan B to avert the looming fiscal cliff. The measure permanently extended a host of tax breaks, including the Bush tax cuts on income up to $1 million, the current estate and gift tax and parity for capital gains and dividend taxes. Boehner paired the bill with a spending reduction proposal in hopes of winning greater support from his caucus.

He gave Republicans almost everything they wanted, but ultimately, this effort to strengthen his position in the ongoing negotiations with the White House failed. Unable to secure the 217 votes needed for passage, Boehner pulled the bill, throwing his speakership into question and leaving the party in disarray.

At the very least, the Plan B debacle has shifted the leverage in the ongoing negotiations from the House Republicans to Democratic Leader Nancy Pelosi (D-CA), as any package would have to win significant Democratic support in order to pass. Here are three lessons from Thursday’s failure:

1) Boehner can’t find 217 votes to raise taxes on the richest Americans — even when the increase is paired with spending cuts to domestic programs. Taxes would have gone up on the very wealthiest families, while a companion measure averted the military and domestic spending cuts set to take place in 2013 and replaced them with a host of reductions to food stamps, Medicaid, Obamacare, and other Republican priorities.

2) Grover Norquist now supports raising tax rates. Grover Norquist’s Americans for Tax Reform announced on Wednesday that “Plan B” would not violate the ironclad oath nearly all Congressional Republicans have taken to never vote to raise taxes. In so doing, the group effectively conceded that President Obama’s proposed extension of tax cuts for the first $250,000 of income would also not violate the Norquist pledge.

3) The Republican caucus is out of step with Americans — and its voters. Sixty-eight percent believe the President has a mandate to cut taxes for working families; while 76 percent think that increasing taxes on the wealthy is an “acceptable” part of any deal. In fact, almost half of Republicans say the President has a mandate to raise taxes on the rich.

Boehner expressed frustration with his caucus during a press conference on Friday, comparing the intransigent members to lifeguards who refuse to save drowning swimmers.

“[I]f I can go in there and save 99 people that are drowning, that is what I should do as a lifeguard,” he explained. “But the perception was out there and a lot of our members did not want to deal with it.”

House Republicans let the five-year farm bill expire at the end of September without a new law to replace the massive measure covering billions of dollars in programs, including food stamps and agriculture subsidies. The Senate passed its own bipartisan, 10-year farm bill in June, and House Democrats and farm state Republicans attempted to force the House to consider a bill to replace it. But the GOP leadership steadfastly refused to vote on it.

As a result, milk prices could jump as high as $6 to $8 per gallon after Jan. 1, when the government will revert to following antiquated 1949 regulations without a farm bill in place:

Under the current program, the government sets a minimum price to cover dairy farmers’ production costs. If the market price drops below that, the government buys dairy products from farmers to buoy prices and increase demand. Since milk prices have remained above that minimum price in recent years, dairy farmers usually do better by selling their products commercially rather than to the government.

But if 1949 rules go into effect, the government would be required to buy dairy products at around $40 per hundredweight — roughly twice the current market price — to drive up the price of milk to cover dairy producers’ cost.

“It would be bad for consumer demand in the long run,” said Chris Galen, a spokesman for the National Milk Producers Federation, which represents more than 32,000 dairy farmers.

In the short term, farmers would see a windfall by selling to the government at a higher price, but as the New York Times reports, that would lead to higher prices in stores and less milk available for manufacturing butter and cheese. “I don’t think customers and food processors are going to pay double what they are paying now for dairy products,” said Dean Norton, a dairy farmer and president of the New York Farm Bureau.

Members of the House Agriculture Committee say they will go back to work on a new five-year farm bill in the new congressional session.

House Republicans plan to vote tonight on their so-called “Plan B,” which would void the tax increases and spending cuts scheduled for the end of the year. Instead, the GOP’s two measures would cut spending from a series of consistent GOP punching bags — food stamps, Obamacare, and Wall Street reform among them — and then extend the Bush tax cuts on income up to $1 million.

However, Plan B would allow the lapse of several key tax credits — including expansions of the Earned Income Tax Credit and the Child Tax Credit — meaning that it would raise taxes on millions of low-income and middle-class families. The Tax Policy Center found that nearly one-quarter of Americans in the lowest income quintile would see their taxes go up by an average of $934.

But don’t tell House Budget Committee Chairman Paul Ryan (R-WI) — fresh off his failed Vice Presidential bid — who claimed on the House floor that “there’s not a single tax increase that we’re proposing here”:

With respect to taxes, heh, what we are trying to do here is limit the damage to the taxpayer. There’s not a single tax increase that we’re proposing here, not a single. What we’re saying is, prevent as many tax increases as possible from hitting anybody in this economy.

Watch it:

As CNBC’s Robert Frank wrote, “drilling down deeper, you find that some of those low-income earners could see a sizable increase. One in five of Americans who earn less than $20,000 a year will see an increase of $1,070 – a sizeable amount for low-income earners.” In addition to raising taxes on the middle-class, Boehner’s Plan B would preserve a slew of tax breaks for the wealthy.

Out of 17 developed countries, single parents in the US are have the fewest resources and the greatest economic hardship, a new report from Legal Momentum shows.

In other countries, parents raising a child alone are offered help from the state and have relative economic stability. But the assessment in the US is different. Not only do American single parents have the largest number of children, they also have the fewest resources to help them raise the kids:

We find that U.S. single-parent families are the worst off. They have the highest poverty rate. They have the highest rate of no health care coverage. They face the stingiest income support system. They lack the paid-time-off-from-work entitlements that in comparison countries make it easier for single parents to balance caregiving and jobholding. They must wait longer than single parents in comparison countries for early childhood education to begin. They have a low rate of child support receipt.

Single parents in the United States also fare worse than their international counterparts when it comes to employment. A huge percentage of single American parents — 25 percent — hold low-wage jobs, higher than any other developed country in the study:

The US was the only country in the study to offer absolutely no paid maternity leave, and just 12 weeks of unpaid leave, to expecting mothers. Some US parents enjoy paid parental leave provided by an employer, but the lowest income Americans (precisely those who match the profile of the average single parent) are those most likely to have no paid leave. By comparison, the countries with the highest amount of leave — both France and Germany — offer 162 weeks total, some paid and some unpaid.

There are a few different solutions that could help with solving the economic difficulties faced by single parents. First, alleviating their tax bill through programs like the Earned Income Tax Credit would help parents see more of the money they make come back into their families. Second, about half of pregnancies in the United States are unintended, and the majority of those pregnancies are to single or unmarried women. There is no reason to suggest that single parents are unfit to raise children, but strengthening access to highly effective methods of birth control would help parents who do not want children to avoid the responsibilities of being a single parent.

Cities and states have seen their budgets decimated during the Great Recession, as revenue plunged due to dropping home prices and high unemployment. They had to make some desperate choices to save funds, including laying off scores of public safety workers (or even turning off their streetlights).

Oakland was no different, laying off 200 police officers, despite the city having the fifth-highest crime rate in the country. However, the city chose to fire those officers while preserving a $17 million payment to the National Football League’s Oakland Raiders and Major League Baseball’s Oakland Athletics:

Oakland, California, the fifth-most crime ridden city in America, faced a $32 million budget deficit last year. It closed the gap by dismissing a fourth of its police force, more than 200 officers.

Untouched was the $17.3 million that the city pays to stage 10 games a season for the National Football League’s Oakland Raiders and to host Major League Baseball’s Athletics in the O.co Coliseum. The funds cover debt financing and operations and are supplemented by $13.3 million from surrounding Alameda County, based on data compiled by Bloomberg from public records.

Nearly every single NFL stadium was built with public money or benefits from public infrastructure built specifically nearby. This money, as many studies have shown, does not provide much economic benefit to the surrounding community. It merely lines the pockets of the already wealthy owners of professional sports franchises.

Adding insult to injury, the National Footbal League itself is a non-profit entity, like other pro sports leagues. The federal government loses about $91 million in revenue due to sports leagues not having to pay taxes.

House Republicans today, in addition to voting on Speaker John Boehner’s (R-OH) so-called “Plan B” — which extends the Bush tax cuts on income up to $1 million — will also vote on a bill to replace the spending cuts scheduled for the end of the year.

As The Hill reported, the bill closely mirrors a measure passed by House Republicans in May known as the “The Sequester Replacement Reconciliation Act of 2012.” (Here is the underlying legislation, which will include these minor tweaks.) That bill voids both the military spending cuts and domestic spending cuts set to take place in 2013 and replaces them with a host of cuts to domestic spending, including:

– Cuts to food stamps that could knock millions of low-income Americans out of the program;

– Cuts to Meals on Wheels, a program that delivers meals to seniors or other individuals who are unable to prepare their own food;

– Cuts funding to health exchanges that will be created under Obamacare and funding for Medicaid included in the same law;

– Cuts to the Dodd-Frank financial reform law that will yield no cost savings, but will make bailouts of big banks more likely;

– Denying the Child Tax Credit to the parents of American children, if the parents are undocumented immigrants.

The White House threatened to veto this set of spending cuts back in May, calling them “a particular burden on the middle-class and the most vulnerable among us.”

The inclusion of these cuts is ostensibly to placate House Republicans upset at Boehner for advancing “Plan B,” which does nothing on the spending side of the federal government’s ledger. Plan B already includes provisions that will cut taxes for some of the wealthiest Americans while raising them for low- and middle-income families.

Speaker of the House John Boehner (R-OH) is forging ahead with his plan to vote on his so-called “Plan B,” a bill that would extend the Bush tax cuts on income up to $1 million. Boehner is calling the bill a “net tax cut,” but as ThinkProgress noted yesterday, it will raise taxes on millions of middle-class families by letting several key tax credits lapse.

According to an analysis by the Tax Policy Center, nearly fifty percent of Americans in the richest 1 percent would see a tax cut under Boehner’s bill, while almost one-quarter of Americans in the lowest income quintile will see their taxes go up by an average of $934, compared to current policy, as this table shows:

Boehner’s plan would raise just 15 percent of the revenue of Obama’s campaign proposal to allow the Bush tax cuts to expire on income in excess of $250,000. 50 percent of the revenue loss would benefit those with incomes above $1 million. (HT: Greg Sargent)