WASHINGTON -- Congress returns to the nation’s capital next week with hopes of a big deal but strong odds favoring another piecemeal approach to avoid the so-called fiscal cliff, in a race against the clock to address tax and budget issues while keeping the U.S. economy from tumbling back into recession.

The cliff is a series of tax measures that have expired, or are set to expire at year’s end, along with automatic, deep budget cuts that will take effect unless lawmakers agree to an alternative plan. Additionally, the government is slated to hit a debt ceiling sometime between December and February, and tough negotiations are expected over terms under which more government borrowing would be allowed.

Going over that cliff carries huge economic risks. Financial markets could respond negatively, erasing the wealth of ordinary Americans who rely on stocks and bonds for their retirement income. Seniors who live off of investment income, and Americans nearing retirement age, are sure to suffer under this scenario.

Congress and the White House usually devise a solution to avoid such crises, but not until they absolutely must. When lawmakers waited until the last minute to resolve the debt ceiling fight last year, and voted down a 2008 bank bailout, stock prices dropped sharply. It could happen again.

“That to me is the wild card,” said R. Bruce Josten, executive vice president for the U.S. Chamber of Commerce.

Lawmakers sent mixed signals this week about serious negotiations vs. driving briefly off the cliff’s edge before settling.

Tuesday’s election results kept the same power players in place, the same group that went to that edge repeatedly during budget and debt ceiling negotiations over the last two years.

House Speaker John Boehner, R-Ohio, said Wednesday that he was ready to “find the common ground that has eluded us” and talk to Democrats, even about raising revenue.

Senate Majority Leader Harry Reid, D-Nev., also talked conciliation, promising not to draw “any lines in the sand.”

The election’s status quo result – the same president, Republicans still controlling the House of Representatives and Democrats remaining in charge of the Senate – suggests the public “is obviously saying work together, meet halfway, come together,” said Sen. Charles Schumer, D-N.Y., usually a fierce partisan.

The rank and file may feel less sanguine. The election solidified conservatives’ hold on the House and liberals’ strength in the Senate, suggesting any deal could have a difficult time winning approval.

The key, said Republicans, is for President Barack Obama to take the lead and offer a detailed plan.

“The only thing that’s changed since the election is that the president is not campaigning,” said Don Stewart, spokesman for Senate Minority Leader Mitch McConnell, R-Ky.

Ultimately, say insiders, the doomsday alternative to inaction will force a deal. The nonpartisan Congressional Budget Office said in a report Thursday that failing to act on the fiscal-cliff components could shave half a percentage point off of growth in the first half of 2013, raising the jobless rate to 9.1 percent and probably would trigger another recession. The CBO also said that addressing the components of the fiscal cliff results in a 3 or 4 percentage point swing between contraction and growth.