Republican Congressional leaders recognize they are entering the upcoming battle in a significantly weakened position, and are already hinting at the possibility of compromise. They also know they need to make a deal more than the other side does. Still, they have not yet given any substantive ground at all on their previous commitments not to raise anybody's tax rates. President Obama and Democratic Congressional leaders are standing pat on their promise to raise the top bracket rate. They are almost daring the Republicans to drive us over the so-called "fiscal cliff." Democrats are acting like the party in mediation who tells you that he doesn't care whether or not he settles the case, because he likes his chances at trial so much.
My recommendation is not to pay too much attention to the initial posturing by either side. That's the same thing I tell people when I mediate disputes in litigation. Initial demands and offers should always be taken with a hefty dose of salt. These positions are often deliberately designed to communicate just how tough a negotiation the other side can expect. Since parties do not expect the other side to jump at an opening offer, they almost always set them too high (or too low) to give the offering party room to negotiate. Sometimes parties want the other side to think they are crazy or unreasonable. That means it usually doesn't help to express outrage at anything said in the opening rounds of a negotiation. There is little reason even to take these opening statements seriously.
It's the second round of offers where negotiations get more interesting. In that round, the Republicans will probably let the Democrats know what they might be willing to do to raise revenues. The Democrats might be willing to let the Republicans know what steps they might be willing to consider to reduce the growth of entitlement programs. The parties could be discussing a total overhaul of the tax code as a means of satisfying both the Republican demand to keep rates low, and the Democratic demand to raise revenue.
Soon, however, it will be time to pay attention. Because what will determine the outcome of these budget negotiations will be the expressed feelings of the American people, and the strength and volume with which the advocates for the Democratic, the Republican, or some in-between positions express their points of view. We are the "clients" in these negotiations, and our representatives are charged with making a deal that reflects our desires. Good luck to them.