“I think the markets are going to react very unfavorably if we leave Dec. 31 and haven’t done anything more than a small extension of this or that. That’s my belief,” Manchin (D-W.Va.) said during POLITICO’s “Energy and the Presidency” policy discussion.

Manchin called on his colleagues in Congress to reach a “grand bargain” to deal with the economically devastating combination of increased tax rates and trillions of dollars in spending cuts that would kick in at the end of the year.

“The financial cliff is real. I don’t want to jump, and I don’t want somebody to push me. I’d like to avoid it and to avoid it we have to have a grand plan,” he said.

Lawmakers during the discussion offered their takes on what will and won’t be included in the package.

Asked if Republicans would be open to eliminating tax breaks and deductions for the oil industry, House Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky.) said, “I would just say that I think there’s a widespread feeling in the House that says, look, let’s just get rid of all of these.”

Mark Udall (D-Colo.) stressed that killing oil company tax breaks must be considered as part of any deal. “I don’t hold any great grudge against the oil industry, but I think it ought to be on the table,” he said.

Udall also called for an extension of the production tax credit for wind, which expires at the end of the year. The wind industry says thousands of jobs could be lost if the tax credit expires.

“A grand bargain is the best thing for our economy. It’s the most natural kind of stimulus, it’s market-based,” Udall said.

Sen. John Hoeven (R-N.D.) said he could envision Congress extending the production tax credit by the end of the year. But he was less keen on eliminating oil company tax breaks and deductions.

“That money is all money that goes into the ground to produce jobs,” he said.

The lawmakers were less optimistic about the possibility of using revenue from a carbon tax to offset cuts in other taxes, a proposal known as a “tax swap” that is being pushed by some conservatives, economists and environmental groups.

“I don’t think there’s going to be a carbon tax adopted this year or in 2013,” Whitfield said, echoing the sentiments of Manchin and Hoeven.

“I think there will be a lot of discussion in policy circles about it. I just don’t see how the politics work,” said Jeff Holmstead, a former EPA official during the George W. Bush administration.

This article first appeared on POLITICO Pro at 2:40 p.m. on November 15, 2012.