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Senator Kent Conrad on the fiscal cliff

Senate Budget Chairman Kent Conrad (D-ND) speaks to the media after a weekly policy meeting at the Capitol on March 20, 2012 in Washington, D.C.

The head of the International Monetary Fund says if Washington doesn't reach a deal on the fiscal cliff, U.S. economic growth could drop to zero.

In an interview with CNN, Christine Lagarde any solution must strile a balance. "My view personally is that the best way to go forward is to have a balanced approach," she said, "that takes into account both increasing the revenue -- which means either raising tax or creating new sources of revenue -- and cutting spending as well."

Here at home, all eyes are on lawmakers in Washington.

Democratic Senator Kent Conrad, chair of the Senate Budget Committee, believes Democrats and Republicans will reach an agreement on the fiscal cliff before the end of the year.

"I believe the two sides are edging closer together," he says. "If you took the president's revenue and the proposed spending cuts that the Republicans put on the table... if you put basically the two together, you'd have a package of over $4 trillion -- which most objective observers have said is what's necessary to get our debt under control."

He believes Congress could pass a framework agreement before the end of the year with some kind of "fail safe mechanism" to ensure a final plan is eventually implemented.

About the author

Jeremy Hobson is host of Marketplace Morning Report, where he looks at business news from a global perspective to prepare listeners for the day ahead.

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