A fiscal cliff compromise won’t include entitlement reform, at least not this year, says Steve Rattner, Morning Joe's economic analyst.
“The deal they’re trying to do is you get something on revenues. Maybe it’s not exactly what the president wants, but something,” Rattner said. “In return, the president gives on entitlement reform. He’s not going to get it done by the end of the year.”
Though legislators have paused talks for the holiday, Rattner noted that negotiations are ongoing.
“There are a lot of staffers in Washington putting together a framework [for compromise],” he said. “I’m not overly optimistic, but I don’t think we should throw in the towel.”
Rattner says this doesn’t mean that overhauling social services is off the table for the president's second term.
The compromise that seems most likely is one that will set up a framework “with some kind of teeth" to help ensure entitlement reform can be accomplished in the first half of 2013.
With only 43 days left to legislate a compromise, business interests continue to worry that Washington might not find a compromise: Republicans and Democrats are dueling over how to raise revenue. House Minority Leader Nancy Pelosi said this weekend Democrats would reject any deal that doesn't raise taxes on the rich. Republicans meanwhile have sought to limit deductions, but keep tax rates the same.