The bipartisan Group of Eight senators are already working on a legislative framework that would offset some of the automatic defense cuts, patch the alternative minimum tax, prevent a 25%-30% reduction in Medicare and extend the debt ceiling. This would provide the president and the Congress some breathing room in order to develop some legislation aimed at reducing the federal deficit. In opposition will be a more conservative House of Representative, who will not easily abandon the Ryan plan, which seeks to reduce long-term mandatory spending and preserve the Bush tax cuts.
It is said that our leaders rise during crisis. Though they didn't rise -- in fact, they fell -- in last August's debt negotiations, the variant view is that our politicians have learned a lesson. And as I have conjectured, I am more optimistic (or maybe more hopeful) that, at least for the time being, the hatchet might be buried somewhat and more sensible and constructive discussions could be chosen over partisan ones.
In conclusion, some fiscal drag should be expected next year, but, if the election is not a cliffhanger, the fiscal cliff may not be quite the fall that I (and others) might have feared it would be.