Friday evening President Obama expressed modest optimism that the House and Senate will reach a fiscal cliff deal before the New Year's deadline, but said that if Congress fails to act, he will ask Senate Majority Leader Harry Reid (D-Nev.) to propose a bill that protects unemployment benefits and stops tax increases on the middle class.

"I will urge Senator Reid to bring to the floor a basic package for an up-or-down vote, one that…lays the groundwork for additional deficit reduction and economic growth steps," President Obama said at a press conference on Friday, after meeting behind closed doors with Sen. Reid, Senate Minority Leader Mitch McConnell (R-Ky.), House Speaker John Boehner (R-Ohio) and House Minority Leader Nancy Pelosi (D-Calif.) "That's the bare minimum...and it shouldn't be that hard."

As my colleague Andy Kroll points out, the fiscal cliff "isn't really a cliff" but we're still "in for roughly $400 billion in tax increases and $200 billion in spending cuts…spread out over many months." Without a fiscal cliff deal, Bush's tax cuts for the middle class will expire, shrinking US GDP by 1.3 percent. Additionally, unemployment benefits worth $30 billion are expected to run out, potentially ending benefits for millions of Americans.

"The American people are not going to have any patience for a politically self-inflicted wound to our economy," the President said. "Outside of Washington, nobody understands how it is that this seems to be a repeat pattern."

Lately, it has been looking more and more likely that America is about to lurch over the fiscal cliff, or fiscal staircase, or fiscal curb, or whatever, due to GOP obstructionism. On Friday, there was a tad more hope on the Hill as congressional leaders met with President Obama to try and come up with some sort of last-minute deal to at least partially avert the $400 billion in across-the-board tax increases and $200 billion in spending cuts set to go into effect January 1. To provide a kick in the pants to their fellow members of Congress, Sen. Tom Harkin (D-Iowa) and Rep. Chris Van Hollen (D-Md.) rallied with dozens of working class folks outside the Capitol Friday to push for a stop-gap measure that would spare the middle class and working poor from tax hikes and expiring unemployment benefits.

Senator Jeff Merkley (D-Ore) expresses his feelings on secret law.

UPDATE: Obama signed the extension of warrantless wiretapping authority into law on Sunday December 30.

There's nothing like a debate over warrantless wiretapping to clarify how the two parties really feel about government. On Friday, the Senate voted to reauthorize the government's warrantless surveillance program, with hawkish Democrats joining with Republicans to block every effort to curtail the government's sweeping spying powers. 

As the Senate debated the renewal of the government's warrantless wiretapping powers on Thursday, Republicans who have accused President Barack Obama of covering up his involvement in the death of an American ambassador urged that his administration be given sweeping spying powers. Democrats who accused George W. Bush of shredding the Constitution with warrantless wiretapping four years ago sung a different tune this week, with the administration itself quietly urging passage of the surveillance bill with no changes, and Senator Dianne Feinstein (D-Calif.) accusing her Democratic colleagues of not understanding the threat of terrorism.

"There is a view by some that this country no longer needs to fear an attack," Feinstein said. 

So what were these drastic changes sought by Feinstein's colleagues that would leave the United States open to annihilation by terrorists? They're mostly attempts to find out exactly how the changes to the Foreign Intelligence Surveillance Act actually work in practice. The most radical proposal, Senator Rand Paul's (R-Ky.) amendment requiring a warrant for the government to access any digital communications, had no chance of passing but clarified just how moderate the Democrats' proposals were by comparison. 

"It's incredibly disappointing that such modest amendments that would have done nothing more than increase transparency and accountability failed to pass in the Senate," said Michelle Richardson of the ACLU.

The Foreign Intelligence Surveillance Act is meant to allow the government to spy on suspected foreign agents abroad, but it is written in such a manner that it allows the government to snoop on conversations involving American citizens, as long as at least one end of the conversation involves a suspected agent of a foreign group overseas. But very few lawmakers know how the law works, or even have the staff with the necessary expertise or security clearances to figure out how it works. So when respected legislators like Feinstein take to the Senate floor to say that any changes would lead to more flaming buildings and American corpses, senators take it seriously. What this means, however, is that Congress just voted to approve a largely secret law it doesn't really understand. In the Senate, they actually voted not to know what the law does by rejecting an amendent that would have made the government state how many Americans have been spied on without a warrant.

"Americans have no way of figuring out how their laws are being interpreted," Senator Ron Wyden (D-Ore.) said. "We don't expect the public to, in effect, just accept secret law."

Wyden proposed that the National Security Agency disclose an estimate of how often these powers have targeted Americans, and that if data on Americans were collected, the authorities seek a warrant before searching for their private information in NSA databases. "I guess you believe that no one is going to attack us, then it's fine to do this," Feinstein said. "I know there are people trying to attack this country all the time."

Senator Chuck Grassley (R-Iowa) was more direct, arguing that the Fourth Amendment only protects Americans if they're being targeted, not if the government just happens to be listening in. "Some people think that a U.S. person has a constitutional right not to have his communications with a foreign target eavesdropped by the U.S. government without a warrant," Grassley said. "But that's not how the Fourth Amendment works." Grassley is afraid Obamacare will pull the plug on your grandma, but he doesn't have any worries that the government might abuse its power to spy on Americans without a warrant.

Wyden's colleague Senator Jeff Merkley (D-Ore.) wanted to force the government to issue declassified summaries of decisions made by the Foreign Intelligence Surveillance Court, which not only approves secret warrants but issues rulings interpreting the breadth of the law. Court interpretation can significantly change the scope of a law that seems plainly written. Nevertheless, when Merkley argued that Americans shouldn't be subject to laws they don't understand, Feinstein mocked him by holding up a copy of the FISA law and saying "this is the law. It's not secret." 

Senator Patrick Leahy (D-Vt.) sought to make the warrantless surveillance law expire a year prior to end of Obama's second term, instead of five years from now. It was voted down, precisely because supporters of warrantless spying understand that the longer Congress goes without debating the law, the more normal these extraordinary powers become. Feinstein explained that she opposed Leahy's measure because "these authorities expire in 4 days." But the bill has been ready for a Senate vote since September—Wyden had been holding it up in order to get floor votes on the minor oversight amendments the Senate just crushed.

Feinstein and her Republican allies insist that the oversight of warrantless surveillance is sufficient, which is why something as basic as disclosing how many Americans have been spied on is unnecessary. As Julian Sanchez of the Cato Institute points out, their argument relies on a catch-22: If there's no evidence of the government abusing its authority, that must mean it never happens. Therefore, there's no need for more oversight. If there is evidence of government abusing its authority, that also proves there's no need for more oversight—after all, the abuses were noticed.

As the debate dragged on, however, Feinstein, growing ever more frustrated, seemed to be arguing not that the government had never abused its surveillance authority but that further disclosure could lead to the abolition of the warrantless surveillance program.

"This is an effort to make that material public, and I think it's a mistake at this particular time because it will chill the program, it will make us less secure, not more secure," Feinstein said. "I know where this goes, it goes to destroy the program. I don't want to see it destroyed."

But if the program is constitutional, and the oversight is effective, what is there to be afraid of?

Sen. Lisa Murkowski (R-Alaska).

In July, Sen. Lisa Murkowski (R-Alaska) did something unexpected. Democrats and Republicans were taking turns on the Senate floor debating the DISCLOSE Act, a bill written by Democrats that would drag anonymous political donors into the daylight. Republicans stood in firm opposition to the bill, leaving it short of the necessary 60 votes and so condemning it to a swift death. The floor debate, then, was academic. When Murkowski took the floor, she nitpicked the version of the DISCLOSE Act before her, but broke with her GOP colleagues by hammering the secret money sloshing around our politics. She later voted no on the bill, but her pledge to battle dark money left Democrats with a shred of hope for future reform efforts.

On Friday, Murkowski joined Sen. Ron Wyden (D-Ore.) in offering for new plan to unmask secretive political groups and their dark-money donors. In a Washington Post op-ed, Murkowski and Wyden write, "At minimum, the American people deserve to know before they cast their ballots who is behind massive spending, who is funding people and organizations, and what their agendas are." More than $400 million in dark money was spent during the 2012 elections, mostly by conservative organizations—a fourfold increase from 2008. Leading dark-money groups included Karl Rove's Crossroads GPS, the US Chamber of Commerce, Americans for Prosperity, and Americans for Tax Reform, the anti-tax outfit run by Grover Norquist.

The Murkowski-Wyden plan—you can read a wonky outline of it here (PDF)—would try to force politically-active nonprofits, big business trade groups, labor unions, and shell corporations to reveal the true source of their funds. In spirit, it's not all that different from the DISCLOSE Act of 2012.

Today, if a donor gives $10,000 or a $1 million to Rove's Crossroads GPS, a nonprofit, to spend on political activities, that donor stays secret. Murkowski and Wyden's plan would make Crossroads disclose that donor. To use a real example, a board member for the tea party-affiliated group FreedomWorks reportedly funneled more than $12 million in donations from him and his family through a pair of Tennessee corporations and then to FreedomWorks' super-PAC. The donor's identity was one of the biggest mysteries of the 2012 campaign, and it remained unsolved until the Washington Post reported on Tuesday—six weeks after Election Day—that FreedomWorks board member Richard Stephenson and his family were behind the big donations. Under Murkowski-Wyden, Stephenson's name would have come out right away.

The two senators, in their outline for new disclosure legislation, try to anticipate the landmines on the road to 60 votes. They suggest raising the limit for donor disclosure from more than $200 to more than $500 to focus on larger donors. They also carve out an exemption so that dues-paying members of, say, the NRA or the Sierra Club who aren't giving money for political activities aren't disclosed like donors giving strictly to influence elections are.

Even then, the Murkowski-Wyden plan faces long odds. A leader of the anti-regulation movement when it comes to money in politics happens to be the top Republican in the Senate, Minority Leader Mitch McConnell (R-Ky.). McConnell claims such disclosure legislation is merely an attempt to intimidate donors, and he convinced his fellow Republicans to defeat similar legislation in 2010 and 2012. This latest plan may begin with bipartisan cred, a breakthrough of sorts for disclosure supporters, but the road to 60 votes means Republicans must break with McConnell—something no GOPer has been willing to do.

Lance Cpl. Edgar Jimenezrojas, a military policeman assigned to Afghan National Civil Order Police Advisory Team, 2nd Battalion, 7th Marine Regiment, remains vigilant while conducting a dismounted patrol near Forward Operating Base Now Zad, Helmand province, Afghanistan, Dec. 18, 2012.
U.S. Marine Corps photo by Cpl. Alejandro Pena.

Senate Majority Leader Harry Reid.

Brace yourselves, nation: It looks as if we're headed off the so-called "fiscal cliff."

After House Speaker John Boehner (R-Ohio) failed last week to corral enough Republican votes on a bill to let the Bush tax cuts expire for the wealthiest Americans, the spotlight moved to the Democratic-controlled US Senate. It is now up to Senate Majority Leader Harry Reid (D-Nev.), working with Minority Leader Mitch McConnell (R-Ky.) and President Obama, to forge a deal to avert the slew of tax increases and spending cuts, hitting domestic programs and the defense budget alike, that begin to go into effect on January 1, 2013. And of course any deal passed out of the Senate must also be approved by the House. Yet the prospects of a timely agreement in the Senate look grim, too.

The consensus on the Hill, Politico reports, is that a fiscal cliff deal by New Year's Eve is "virtually impossible":

With the country teetering on this fiscal cliff of deep spending cuts and sharp tax hikes, the philosophical differences, the shortened timetable and the political dynamics appear to be insurmountable hurdles for a bipartisan deal by New Year’s Day.

Hopes of a grand-bargain—to shave trillions of dollars off the deficit by cutting entitlement programs and raising revenue—are shattered. House Republicans already failed to pass their “Plan B” proposal. And now aides and senators say the White House’s smaller, fall-back plan floated last week is a non-starter among Republicans in Senate—much less the House.

On top of that, the Treasury Department announced Wednesday that the nation would hit the debt limit on Dec. 31, and would then have to take “extraordinary measures” to avoid exhausting the government’s borrowing limit in the New Year.

Senate Democrats are considering fallback options to resolve the crisis, but they appear unlikely to push forward if Republicans decide to mount a serious opposition. The White House, a senior administration official said, is in close coordination with Senate Democrats. Late Wednesday, Reid’s office pushed Republicans to pass a bill to extend tax rates for income below $250,000.

The fiscal cliff, to be clear, isn't really a cliff. As Kevin Drum pointed out, it's more of a staircase or a slope. We're in for roughly $400 billion in tax increases and $200 billion in spending cuts, but that pain will be spread out over many months. If Congress were to cut a deal soon after January 1, the fiscal pain would be minimized; let it drag on for months and then the pain really hurts.

How much hurt? Those tax hikes and spending cuts would suck almost 3 percentage points out of the US' gross domestic product in 2013 and nudge the unemployment rate up by a disastrous 3.4 points, according to the Congressional Budget Office.

That's recession territory. And for the moment, that appears to be where we're headed with Congress locked in a stalemate.

Sgt. Quentin Deckard, an infantryman assigned to Headquarters and Headquarters Company, 3rd Brigade Special Troops Battalion, 3rd Armored Brigade Combat Team, 3rd Infantry Division fires an AT-4, an anti-tank weapon, at the Udairi Range Complex near Camp Buehring, Kuwait, Dec. 20. US Army photo.

The drama just won't stop at FreedomWorks. On Monday, Mother Jones DC bureau chief David Corn revealed that after former GOP Rep. Dick Armey left the tea party group in early December, Armey's allies on the board launched a legal probe into the group, and FreedomWorks' president fired back with allegations that Armey had betrayed the organization's mission. Wednesday, the Washington Post published a riveting account of Armey's alleged attempted coup, complete with a gun-wielding "assistant." And later that day, Corn revealed the identity of that gunman. Corn discussed the scandal on Hardball with Chris Matthews, and with Robert Siegel on NPR. Listen to the NPR segment here. Watch Corn on MSNBC here:

For more of David Corn's stories, click here. He's also on Twitter.

When the streaming-video site Netflix suffered an outage on Christmas Eve, millions of Americans confronted the terrifying possibility of an evening of spent talking with their relatives instead of re-watching Die Hard. But Netflix's technical snafu wasn't the only streaming-related news infuriating Americans over the Christmas holiday.

Last Tuesday, the Senate quietly altered a key privacy law, making it much easier for video streaming services like Netflix to share your viewing habits. How quietly? The Senate didn't even hold a recorded vote: The bill was approved by unanimous consent. (Joe Mullin of Ars Technica was among the first to note the vote.) 

Here's what changed. For the last 24 years, ever since a local reporter easily obtained failed Supreme Court nominee Robert Bork's video rental records without his consent, the law has required video rental companies to get your permission each and every time they share information about the movies you rent or buy. Although Bork himself had no respect for the idea of a constitutional right to privacy, part of his legacy ended up being one of the strongest privacy-related laws in the country. 

As of last week, that's all in the past: Video streaming companies that want to share your data now only need to ask for your permission once. After that, they can broadcast your video-watching habits far and wide for up to two years before having to ask again.

If Sen. Patrick Leahy (D-Vt.) had his way, Americans would have gotten something in return for this reduction in video privacy rights. The law governing law enforcement's access to online material, the Electronic Communications Privacy Act (ECPA), was written when email was a relatively new technology, well before anyone imagined the amount of personal information the average person could store online. The ECPA makes it a trivial matter for law enforcement to access just about any of your personal data stored in the cloud—even without a warrant.

Leahy always supported the video privacy changes. But his version of the Netflix bill, which was approved by the Senate Judiciary Committee in late November, would also have updated the ECPA. Civil libertarians saw Leahy's proposal as a trade-off—in exchange for weakening the video privacy law, Congress would strengthen protections for your personal online content, including photo albums, documents, and archived emails. Video-streaming and rental companies wouldn't have to ask permission every time they wanted to share your data, but the feds would have to obtain a warrant to access your online correspondence—just as they must if they want to read the letters in your desk at home.

But the trade-off never happened. Last week, the House passed a version of the video privacy bill without Leahy's added protections. That left Congress with a choice between the House bill, the Senate bill, or a compromise. On Tuesday, the Senate caved and approved the House version of the bill. Why? Because the video streaming and social media companies really, really wanted this change. Media companies have lobbied hard on the measure; Netflix alone spent more than half a million dollars this year lobbying Congress on this and similar proposals

As the Senate was preparing to scrap the video privacy protections, Leahy gave a speech urging Congress to take up his online privacy reforms again next year. But now that Netflix and the media companies have gotten what they wanted, there's no trade to be had. Congress would simply be protecting Americans' privacy of its own initiative, unprompted by any kind of trade-off or by the kind of outrage that Republicans felt when Bork's video rental records were exposed. And as David Petraeus recently learned, not even the CIA director losing his job in the wake of an FBI investigation that led to no actual charges could provoke Congress into updating the country's digital privacy laws. So Leahy's calls for reform appear likely to go unanswered.

On Wednesday, the Washington Post published a riveting account of the feud within FreedomWorks, disclosing that arch-libertarian Richard Stephenson, a reclusive millionaire, was the secret source of $12 million the tea party group used to help Republican candidates in the fall election. But what grabbed the most attention was the story's recounting of a contentious September 4 meeting in which former GOP Rep. Dick Armey, then the chair of FreedomWorks, brought a gun-wielding "assistant" to the offices of FreedomWorks. Referring to Matt Kibbe, the president of FreedomWorks, and Adam Brandon, its senior vice president, the newspaper reported:

Richard K. Armey, the group's chairman and a former House majority leader, walked into the group's Capitol Hill offices with his wife, Susan, and an aide holstering a handgun at his waist. The aim was to seize control of the group and expel Armey's enemies: The gun-wielding assistant escorted FreedomWorks' top two employees off the premises, while Armey suspended several others who broke down in sobs at the news.

This sort of drama does not happen often in Washington, and the Post did not identify the guy with the gun. But Armey tells Mother Jones that this episode has been hyped up by his FreedomWorks foes, and he says the not-so-mysterious gun-touting assistant was a former Capitol Hill police officer named Beau Singleton, who used to be part of Armey's congressional security detail and who has volunteered his security services to Armey and FreedomWorks for years. "He was well-known to the people at FreedomWorks," Armey says. "He has provided me personal security on many occasions when I was in Washington." Singleton also oversaw security for FreedomWorks in September 2009 when it organized a large rally in Washington. Singleton, Armey says, is authorized to carry a gun, but he does so in a back holster that cannot be seen by an onlooker. "I was unaware he had a gun [at the meeting]," Armey maintains. "He kept it under his coat in the back....But the news looks like Armey came in there like John Dillinger, all guns a-blazing. That was false."

Armey says that his wife, Susan, and his assistant, Jean Campbell, were concerned about a FreedomWorks official losing his temper at this meeting and suggested that Singleton join Armey and the two of them on this trip to the group's office. But he insists there was nothing odd with him showing up at FreedomWorks with Singleton by his side. 

Singleton, 56, confirms Armey's account. He says that he has known Kibbe and Brandon for years and that he had often "been around" at FreedomWorks. He adds that during the meeting between Armey and Kibbe, he "just observed. I was just kind of there…I can't see why they would act like I was menacing." In the Post's account, the unnamed gunman escorted Kibbe and Brandon off the premises, but Singleton says he did no such thing. "Whatever problem they had with FreedomWorks, I had no issues with them…I was not used to get them out of the office." 

This latest tale of the war at FreedomWorks is an indication of how bad the blood has become. This man-with-a-gun story, which would seem to benefit Kibbe's side, comes after Mother Jones revealed that board members C. Boyden Gray and James Burnley IV recently initiated a legal investigation of alleged wrongdoing at FreedomWorks and that Kibbe, in response, drafted a memo accusing Armey, Gray, and Burnley of mounting a "hostile takeover" of the group in order to make it part of the Republican establishment. There's no telling if FreedomWorks, an important outfit for the tea party, can survive this civil war. But there probably are more leaks to come.