The president, fresh off his reelection success, faces headwinds going into his new term: the crisis in Gaza, rebuilding after a devastating hurricane, and of course, dealing with the “fiscal cliff,” the deep cuts in spending and tax increases that Congress agreed upon would occur on January 1st if a spending deal was not reached. Neither the President nor congressional Republicans view this as a particularly attractive solution, considering the Congressional Budget Office has said that such a “fiscal cliff” scenario would cause a recession. The CBO estimates that such a situation will cause unemployment to spring back up to 9.1%.

“Fiscal cliff” talks began in earnest this week, as congressional Republicans sought to find a middle ground between the line in the sand approach they sought before on spending cuts with the recognition their party received a drubbing in the election, and a reenergized President Obama, who believes he has the upper hand in any negotiation based on the election outcome. Both sides, at this early date, are cautiously optimistic that a deal can be struck, although the opening rounds did leave some somewhat pessimistic. What is certain, at this point, that the game is on, and it’s not clear what may occur.