US Fiscal Talks Going 'Very Well,': Corker

Labor Backs Obama on 'Cliff' as Congress Returns
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Ongoing U.S. "fiscal cliff" negotiations were proceeding "very, very well," a top Republican senator told CNBC on Monday, heightening expectations that Congress and the White House may strike an accord as early as Tuesday which could prevent the economy from absorbing a raft of tax hikes and spending cuts.

With the final trading day of 2012 hanging in the balance of tough discussions between President Barack Obama and congressional leaders, Sen. Bob Corker, Tennessee's senior senator and an active participant in negotiations, told CNBC's " Squawk Box " that a deal was "going to happen, it's probably going to happen today."

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In talks about raising taxes on the wealthiest Americans, reports say that discussions between Senate Minority Leader Mitch McConnell and Vice President Joe Biden have set an income threshold of around $400,000.

In his interview with CNBC, Corker cited that figure as "my guess," but wasn't certain.

Still, Corker tempered some of his optimism by voicing skepticism about claims that the White House has offered up about $1 trillion worth of spending cuts. Corker said that it was likely that an agreement would be reached, but "nothing is going to happen that has anything to do with deficit reduction."

With discussions still ongoing about raising the U.S.'s statutory borrowing limit, which could be breached within days, Corker added: "I do think there is going to be a [resolution] to this, but the problem is we created this fiscal cliff to make some tough decisions, and none are going to be made. Not one.

A deal to raise the U.S. borrowing threshold from its current $16 trillion limit "will be a serious moment, and our economy is not going to be what it could have been," the senator said. "We'll eke by this, but the real discussions are going to begin."

The Biden-McConnell negotiations appeared to offer the last hope for avoiding the across-the-board tax increases and draconian cuts in the federal budget that will be triggered at the start of the New Year because of a deficit-reduction law enacted in August.

While Congress has the capacity to move swiftly when motivated, the leaders of the House and Senate have left themselves little time for what could be a complicated day of procedural maneuvering in the event of an agreement.

Boehner has insisted that the Senate act first, but that chamber does not begin legislative business until about noon Monday.

Other Business Also on Agenda

And the cliff is not the only business on the House agenda. The top leaders in both parties on the House and Senate Agriculture committees have agreed to a one-year extension of the expiring farm law to head off a possible doubling of retail milk prices to $7 or more a gallon in early 2013. Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., indicated the House could vote on the bill soon, though House leaders have not yet agreed to put the bill on the floor.

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Also, relief for victims of super storm Sandy is waiting in line in the House, though the House could still consider a Senate bill on assistance for the storm until Jan. 2, the last day of the Congress that was elected in November 2010.

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Expiring along with low tax rates at midnight Monday are a raft of other tax measures effecting tens of millions of Americans.

A payroll tax holiday Americans have enjoyed for two years looks like the most certain casualty as neither Republicans or Democrats have shown much interest in continuing it, in part because the tax funds the Social Security retirement program.

The current 4.2 percent payroll tax rate paid by about 160 million workers will revert to the previous 6.2 percent rate after Dec. 31, and will be the most immediate hit to taxpayers.

A "patch" for the Alternative Minimum Tax that would prevent millions of middle-class Americans from being taxed as if they were rich, could go over the cliff as well. Both Republicans and Democrats support doing another patch, but have not approved one.

(Read More: Middle Class Gets 'Cliffed' by Huge Tax If No Deal Reached)

At best, the Internal Revenue Service has warned that as many as 100 million taxpayers could face refund delays without an AMT fix. At worst, they could face higher taxes unless Congress comes back with a retroactive fix.

After Tuesday, Congress could move for retroactive relief on any or all of the tax and spending issues. But that would require compromises that Republicans and Democrats have been unwilling to make so far.

Obama said on Sunday he plans on pushing legislation as soon as Jan. 4 to reverse the tax hikes for all but the wealthy.