It's not a 'cliff', it's a bomb. For whatever reason, congress decided to lay this bomb last year- as a condition for passing a routine, meaningless administrative law last year, a law that's always passed without comment when Republicans are in charge, clear double standard, shock doctrine attack on needed social welfare spending, ect, ect. If congress decides to set it off, it will probably drive the economy into double-dip recession. But so would any austerity. The wailing and gnashing of teeth over this austerity shows nobody seriously cares about the debt- they care about destroying Medicare and Social Security, and don't care how long the recession has to go to achieve that.
Personally, I feel that congress won't come to a decision and will just repeal the stupid, needless legislation (can Obama veto it?). Nobody really wants their military-industrial donors being out of a job. But let this be a lesson- austerity is for the boom, not the bust.