U.S. President Barack Obama is flying back to Washington later today, cutting short his end-of-the-year break in Hawaii to try to wrangle a last-minute deal to avert the so-called "fiscal cliff."
Normally, the president stretches his Christmas holiday in his native state into the New Year.
Members of Congress are also making an early return to the U.S. capital this week and are expected to be back Thursday.
In just five days, about $600 billion US worth of tax hikes and spending cuts are scheduled take place unless the White House and the Congress can agree on a compromise to soften the blow. Economists say tax increases and spending cuts of that magnitude could send the U.S. economy back into recession by the end of next year.
At this point, there's not much optimism that a wide-ranging deal can be reached by Jan. 1. So the talk increasingly is turning to some kind of partial deal that would extend tax cuts for most Americans and put off any consideration of spending cuts.
President Obama has proposed that tax rates be allowed to go up for all Americans earning more than $400,000. Republican House Speaker John Boehner countered with a proposal to allow tax hikes on those earning more than $1 million. But Boehner pulled his plan before a vote in the House last week when it became clear that he didn't have enough support among his Republican colleagues.
Middle class is watching
The sense of urgency to reach a deal persists even though the "fiscal cliff" metaphor is a bit of a misnomer. If no deal has been completed by New Year's Eve, the full weight of the spending and tax changes does not arrive the next day; the U.S. economy will not immediately go over any so-called cliff. Higher tax rates would just begin to be levied in the New Year.
But from a political standpoint, the blowback would be huge when Americans see their January paycheques shrinking to suddenly pay the higher taxes that automatically kick in if no deal is reached to extend the George W. Bush-era tax cuts.
By some estimates, the average middle class family will see its tax bill go up by about $2,000 a year if a deal can't be hammered out.
So the pressure is on to find a quick compromise. U.S. taxpayers want their politicians to resolve at least part of the problem by New Year's Eve, if for no other reason than they're sick of hearing both sides squabble about something that was entirely of Washington's making.
But it's also clear that if the hoped-for compromise remains out of reach, both sides will be ready to roll out their own "blame game" strategies to persuade Americans that it really wasn't their fault.