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Please begin with an informative title:

President Obama comforts a marina owner after Hurricane Sandy struck. &nbsp;Oct. 2012
President Obama has comforted Sandy victims. Now he must ensure they receive the aid they need.
Touring superstorm Sandy-stricken areas, President Barack Obama said:
I'll be working with the members of Congress to do everything we can to get the resources needed to rebuild[.]
That work must begin with the negotiations regarding the austerity bomb (a/k/a the "fiscal cliff") that Republicans in Congress lit when they held the debt ceiling hostage last August. New York Gov. Andrew Cuomo has requested $30 billion in aid to rebuild after Sandy. Estimates of just insured losses in New Jersey top $20 billion. And Sandy wreaked havoc in other states as well.

Avoiding the austerity bomb and tossing the economy back into recession requires federal aid that will address the recovery and rebuilding needs of affected areas. As Queens Congressman Joe Crowley said:

If New York — the region around New York in the tri-state region — turns into an economic downturn because of the effects of the storm, it will certainly affect the entire nation's economy[...] And so I think it's in all of our interests to get the region back up and running at full throttle so that it doesn't become a drag on the rest of the country.
Appropriate levels of federal aid for recovery and rebuilding in Sandy-ravaged areas must be a central part of negotiations and deal-making on the austerity bomb. A few ideas on that on the other side:

You must enter an Intro for your Diary Entry between 300 and 1150 characters long (that's approximately 50-175 words without any html or formatting markup).

One of the revealing aspects to the panic over the so-called "fiscal cliff" is the reveal of the misleading idea that what matters now is addressing the deficit. The "confidence fairy" is truly dead. As Paul Krugman noted:

[T]he only reason to worry about the fiscal cliff is if you’re a Keynesian, who thinks that bringing down the budget deficit when the economy is already depressed makes the depression deeper. And the same logic actually says that we should not just avoid spending cuts, we should raise spending right now. [... T]he supposed deficit hawks, who should be celebrating the prospect of such a big move in their direction, aren’t. Why? [But] this isn’t the deficit reduction they wanted — it was supposed to involve hurting the working class, not raising tax rates at the top (which were supposed to be cut!). [Emphasis supplied.]
The "deficit hawks" aren't worried about the deficit—they are worried that middle class and poor people are not being hurt. The "fiscal cliff" nonsense demonstrates this as clearly as anything could. They should be celebrating, not wringing their hands. They are wringing their hands because the "fiscal cliff" involves the Bush tax cuts for the rich expiring and cuts to military spending. The only government spending that worries them is spending that benefits the middle class and the poor. When discussing these issues it is imperative to keep that in mind.

Indeed, the progressive position on the "fiscal cliff" (more correctly, the "austerity bomb") should be to look for productive ways to increase federal spending in the short term. Senate Democrats may be coalescing around this idea:

“We need to do something on stimulus as part of the overall fiscal cliff,” said Sen. Charles Schumer (D-N.Y.), the Senate Democrats’ chief political strategist. “We have to do something because the economy is not growing fast enough in the first year or two.” Schumer said deficit reduction and a federal stimulus package are not mutually exclusive.

“You can have a 10-year deficit-reduction package that encourages a way to get the economy moving more quickly in the first year or so,” he said. Schumer said extending the payroll tax holiday and “dealing with infrastructure” are among “all kinds of different things” on the table.

I heartily endorse this idea. But I'm skeptical that such a deal can be struck in that framework by the end of the year. Accordingly, I believe that short-term stimulus can best be pushed in the form of federal aid for Sandy recovery and rebuilding, including infrastructure. This is the type of push that should be political difficult to oppose. And if such spending is likely to pass, THEN, it seems to me, that a more generalized stimulus package can garner the necessary support. In other words, once the congressional reps from the rest of the country see that Sandy-ravaged areas are going to get federal money, then they will want some for their areas of the country too. Call it a sort of build out strategy for building political consensus for stimulus spending.

What would such a deal look like? I think it will be long on promises of agreements to agree about long-term deficit reduction (to be carried over to the next Congress), agreement on extending the Bush tax cuts for a period (6 months to a year) and a suspension of the automatic spending cuts (sequestration). We can already see this type of formulation coming from GOP House Speaker John Boehner:

“Since tax and entitlement reform are too complex to complete this year, the Speaker noted, our goal for this year, in the coming weeks, is to settle on long-term revenue targets for tax reform as well as targets for savings from our entitlement programs,” according to a Boehner aide. “Once we settle on those targets, the Speaker proposed, we can create simple mechanisms, in statute, that would achieve those revenue and spending goals. They would be in place unless or until more thoughtful policies replace them. The Speaker recalled the president’s call for a ‘balanced’ approach to the debt problem — a combination of revenues and spending cuts — and said the framework Republicans have proposed is consistent with it.”

The framework suggests that automatic budget cuts and tax increases scheduled for the new year would be removed and replaced with a different kind of enforcement mechanism that would include both higher taxes and lower spending.

Add stimulus to the deal, appropriate levels of Sandy recovery and rebuilding aid and others such as proposed by Senator Schumer, and I think there is a deal to be had with the lame duck Congress this year.

I would support such a deal as it could deliver what should have been done years ago—short-term stimulus from the federal government.

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