There's just not a lot Republicans and Democrats can agree to spend money on.
What's on the table includes some tax increases, spending cuts, and debt ceiling raising that might resolve this. But the fundamental disagreements that lead to these consistent budgetary problems remain, and the arguments keep getting hotter.
There are signs of a coming compromise. Some Republicans like Senator Bob Corker say they're willing to accept tax hikes on the wealthy (and drop the Grover Norquist pledge to never raise taxes ever again) if it leads to some spending cuts in return. The President insists on increasing taxes on the wealthiest Americans and says that's one principle he won't compromise on, implying that he would compromise on some other issues. At the moment insiders are silent about the ongoing negotiations, and according to policy wonks we should see the silence as a cool thing.
If Obama and House Speaker John Boehner really are getting closer to a deal, it could mean the nation takes concrete steps to resolve its fiscal issues. On the other hand, the government could always just keep kicking the can down the road, because passing problems onto next generation after next generation is
Either way, acting to do something about the fiscal cliff (instead of just going straight over it) seems to be a prudent idea, as does figuring out a way to make the national debt quit blowing up due to budgets that aren't responsible about money.
What can you do in the meantime? Keep an eye on what happens, lobby your legislators, and vote to reelect the ones you agree with next time they're on the ballot. It'll be at least two years though, because 2012's election is already over. And if your legislator is on what you think is the wrong side of this debate, but you didn't vote or donate or volunteer or anything for their opponent, right now your legislator is all: