The Economist's Free Exchange blog reports:
Until this point there have been two likely outcomes: no deal at all and the country going over the cliff, or a grand bargain. But there is third option. Mr Obama has been demanding the House pass an-already passed Senate bill (S.3412) that keeps tax rates where they are for families making less than $250,000 and lets the others return to their pre-2001 level. There is growing support among Republicans for this option, and indeed Andy Laperriere, policy analyst for ISI Group, now considers it the most likely outcome. Neither the world, nor the stock market, appreciates how bad this would be.
It goes on to make a persuasive case that this is the worst possible outcome.