After conflicting reports Thursday on whether a new offer was coming and in advance of a White House summit Friday afternoon, President Obama has reportedly crafted a "scaled back" proposal that would — temporarily, at least — avoid next week's fiscal cliff. The new "mini-deal" offer (a.k.a. the new "Plan B") would delay or replace the vast majority of spending cuts called for in the automatic sequester, most likely focusing on the sharp cuts in military spending. It would also seek to settle the planned hike in the Alternative Minimum Tax, extend unemployment benefits, and stop planned cuts to Medicare reimbursements. And as one final bonus, the president's latest proposal reportedly includes a "milk fix" that will avoid a dairy market catastrophe created by the failure to renew the farm bill. 

On the key plank of taxes, the president will continue to demand that Bush-era cuts be extended at all income levels, except for those making more than $250,000 a year. However, Bloomberg also reports that Senate Democrats are willing to raise that to $400,000 a year. That could be the level at which a deal could be struck with House Republicans. So even though the president's offer is mostly unchanged, the seeds of a compromise may be entering their weekend reveal.

CNBC is also reporting that if agreed to, the deal in the works would not be a permanent fix, but a 60-90 patch that would prevent taxes from going up on most Americans and avoiding the worst consequences of the cliff rules. Of course, in practice it merely sets up yet another deadline and yet another round of political drama, but it pushes the onus for a solution on to the next session of Congress, which might theoretically be more friendly to the Democrats position. Or it might convince the Republicans that the leverage has shifted back toward their plan. There's still no telling how January will play out. For now, the House has been asked to return for a session Sunday night at 6:30 p.m., with the markets set to open Monday, when Treasury Secretary Timothy Geithner says the U.S. will hit its debt ceiling.

That's all assuming that this deal can even get passed. The president will reportedly present his new offer at a 3:00 p.m. meeting on Friday at the White House with the four top Congressional leaders, John Boehner, Mitch McConnell, Nancy Pelosi, and Harry Reid. The entire deal will hinge on Boehner being willing and able to sell the deal to his House members, or at least being willing to let the members who wish to vote for it go to the other side. We'll just have to wait and see how the afternoon meeting plays out. Stay tuned....