Updated 4:45 p.m. ET
As the nation teeters on the edge of the so-called "fiscal cliff," President Obama returns to Washington Thursday to resume negotiations with Congress over a deal to keep taxes from going up on Americans. But a cloud of uncertainty hangs over the state of play as lawmakers trickle back to Capitol Hill for a new round of talks, and voters are expressing diminishing faith in the two sides' ability to hammer out an agreement.
Mr. Obama, who spent Christmas in Hawaii with his family, announced yesterday he would be returning to Washington on an overnight flight tonight. But after ongoing negotiations fell apart last week between the president and House Speaker John Boehner, R-Ohio, it's not clear if a deal will be made before a series of tax hikes and spending cuts set to go into effect next year.
A senior White House official told CBS News that action to avert the fiscal cliff "requires a willingness by two individuals to make it happen." The official said it will be up to Senate Minority Leader McConnell, R-Ky., not to block a vote and up to Boehner to allow a vote on a proposal to preserve middle-class tax cuts and extend Social Security benefits.
The official said the president, "hopes and expects Congress will handle its business." Noting failure to reach agreement "would be bad for the economy," the official added that Washington "shouldn't shoot itself in the foot again."
According to a new Gallup poll, voters are markedly less optimistic now than in recent weeks that the two parties will be able to hammer out a compromise before January 1. The survey, conducted between Dec. 21-22, indicates that 50 percent of Americans believe that a deal is likely, while 48 percent say it's doubtful; in the previous three weeks, a firm majority of Americans expressed confidence that a deal could be reached.}
Congressional Republicans have indicated in recent days that they have not been in communication with Senate Majority Leader Harry Reid, D-Nev., over the makings of a possible deal, and signs indicate that Reid is crafting his own package with input from the White House.
Reid's proposal would likely be a stopgap measure extending the Bush-era tax cuts on 98 percent of incomes while letting them expire for the wealthiest Americans. It could also include enough short-term spending cuts to temporarily offset across-the-board spending cuts set to go into effect on January 1, 2013, and try to tie up some year-end loose ends by extending long-term unemployment benefits, patching the alternative minimum tax, and preventing a big scheduled drop-off in Medicare reimbursement rates to doctors at the start of the year.
For such a bill to reach the president's desk, however, Boehner would have to agree to take it up in the House -- a move that could incite further ire among the conservative wing of his party. If he did decide to bring a Democratic bill up for a vote on the House floor, 26 Republicans and all 191 Democrats would have to vote for it to move the process forward.
Many Democrats believe they have a sufficient amount of Republican support, however, and are urging Boehner to bend to their will.
"If Speaker Boehner is willing to bring to the floor of the House a bill, and just let this House work its will, Democrats and Republicans voting as their conscience determines, then I believe we can get something done," Rep. Chris Van Hollen, D-Md., told Bloomberg TV recently.
Another possibility is that Republicans allow the nation to go over the cliff, at which point the Bush-era tax cuts would expire and rates would go up on all Americans, before promptly working to pass a bill in January restoring those cuts for most of the population. That outcome could increase economic uncertainty on Wall Street but would allow congressional Republicans to uphold their commitment to not raising tax rates.
"I'm not sure if either side is watching very carefully, and listening to what the American people think," said Republican strategist and pollster Frank Luntz in an interview today with "CBS This Morning." "When we asked the American people, Who is the GOP fighting for and representing? The number one answer, the rich. The number two answer, big business. Well, well back is number three, hard-working taxpayers. By the republicans fighting this tax increase on the most wealthy Americans, the public looks at that and says once again the GOP is standing up for the rich."
The Democrats, Luntz argued, have been equally tone deaf.
"What the Democrats don't understand is that the hostility towards how much Washington spends, that this whole discussion over the last six weeks has been about raising taxes on the wealthy rather than cutting wasteful Washington spending," he said.
CBS News' Peter Maer contributed to this report.