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Are We Closer to a Fiscal Cliff Deal Than We Think?

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    'Special Report' host Bret Baier on fiscal cliff talks.

  • Duration 5:16
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Another day another meeting today it was between governors and the president but the gulf between Democrats -- Republicans.

Still looks all awfully lot in dealing with the looming tax increases and spending cuts.

But aren't they closer to a deal than we think.

Here to answer her hair has to Santorum forty -- -- now from Washington DC and you should know better than anybody.

What -- White House -- the Democrats surprised by this Republican proposal because it was so far away from what the president talked about.

They and I don't think that they were surprised.

They knew -- another proposal would be coming back they probably guessed that it wouldn't include.

Tax rate increases because really that's the dance that's going on here it's kind of two scorpions dancing around each other waiting to to strike here and you know Erskine Bowles of Simpson Bowles fame.

Said last night in an interview I think he said it best that.

Both sides would get killed by their base if the true deal was out right now.

I mean they would just get killed.

They know and that trend deal is do you have a -- I don't think that -- yet I think they know the framework of the true deal you know that we went through this debt ceiling increase last year.

And they almost got there.

They know what each side needs to have what they're based to be semi happy they know where the Red Line is that.

That at least they've talked about.

But I think until you get in that room.

And hammer it out you don't know the the parameters of where exactly that's gonna be -- I don't think you're gonna get to that room.

Until we get closer to the deadline unfortunately.

Look at his -- almost three weeks since the president met with congressional later this may -- they meet later this week but -- time is of the essence here.

But what is the what are the -- that you think that this ends disastrous.

-- Within the month.

You know I I've quoted at like 45%.

I mean this is my guess some not a there are people here in this town who think it's higher than that I don't think so I do we just had this the house.

Minority leader Steny Hoyer come out and say in the next few days we will see substantive movement in private to get this -- I mean understand.

A lot of stuff is happening with staff.

To hear Republicans say.

Is it that that there's not a lot of progress being made.

I've Democrats will say we know where you know that things are going so I think Democrats want to talk about the progress is being made.

Republicans -- -- say this is going nowhere and eventually you're going to get people in -- room.

And that you're gonna hammer something out I don't think either side really wants to go over the cliff this whole narrative that.

That Democrats want to go over.

I'm not buying because I think if the president goes over this -- the economy really does take a hit they can do some things to stave it off.

But he loses a lot of power and he has some other things that he wants to get done.

If any saying you will you will likely see your reaction in the market how big assured me nobody knows but even if you.

Have a small it means have lots one way or another and eaten.

If the leader of the free world who wants that.

In terms of do what we still gonna get a two part deal Bret is that what we're expecting -- be something.

That is short term and then major tax reform -- tackle later next year.

Yet because.

Even speaker Boehner has has talked about how anything big like tax reform.

Entitlement reform on a big scale.

Has to be done by the new elected congress in 2013.

It's not gonna going to happen in a lame duck session.

And you're just not gonna have enough time so I mean.

You're going did go through the committee process you're going to it'll be -- long term process that that happens next -- so something will happen.

Before the end of this year.

Likely and again I think it will.

But.

They won't be the whole -- -- -- tax rates go up.

-- -- -- -- I I think that is high.

For some segment of the population the top top earners tax rates go up now.

I think question is whether it becomes.

The cap is one million and above were 500000 and above but at some point the president.

Will probably have to have that as part of the deal.

That tax rates in some way shape reform.

Go up maybe not all the way to 39 point six.

The Clinton Era rates.

But they'll have to go up some way because he thinks that election was a mandate and he campaigned on that.

And look out Florida and Nevada because here they come -- benefiting your business who could delayed -- based data dubbed active.

-- it was great to save thank you so much.

Please watch if you don't already well you're an idiot if you down but -- on every weeknight 6 PM -- -- special report.

You cannot miss it on Fox News Channel -- be well.

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