So how far are Dems willing to go in making concessions on entitlements in the fiscal cliff talks? The general sense in liberal and labor circles is one of cautious optimism — tempered by an awareness that a cave is always possible.

A coalition of unions — SEIU, AFSCME, and the NEA — has released new ads today pressuring Dems not to give in to GOP demands for deep spending cuts. The ads — which target Dem senators Mark Udall, Michael Bennet, Claire McCaskill, Jim Webb, and Mark Warner in their states — make the key point that the best way to reduce the deficit is to invest in job creation and grow the economy, and they demand that the senators protect Medicare, Medicaid and education. They insist that Dems “continue to stand up for us,” rather than cut “programs that families rely on most.”

This comes as some self-described “centrist” Democrats are already making noise about not necessarily supporting the Obama plan to raise taxes on the rich. And the centrist group Third Way, in a message intended to generate inside-the-Beltway chatter, released a new poll supposedly showing support for a bipartisan deficit “deal.”

What you’re really seeing here is a battle over the meaning of the election. Labor and liberals contend the message was clear: At a time of runaway inequality, the rich must sacrifice more to bring down the deficit; the American people do not want any change in the core mission of Medicare; and they continue to support a strong safety net and an expanded role for government in spurring growth and social mobility. After all, the election was a straight up clash of ideological visions over tax fairness, the proper scope of governmental involvement in the economy and in reducing inequality, and the question of whether we should preserve the social contract underlying the major progressive reforms of the 20th Century. One side won decisively — liberalism.

The centrist reading of the election is harder to explain. The Third Way poll seems designed to create the impression that the public yearns for a centrist deficit agreement. It tells us Obama voters support a mix of tax increases and spending cuts as part of a “bipartisan” deficit deal and that they want lawmakers to “fix” entitlements. But so what? A mix of tax increases and spending cuts is the liberal-Democratic position. The argument is one over degree. No one is arguing for no spending cuts whatsoever or doing nothing on entitlements or the deficit. Rather, the left wants a fiscal cliff solution that doesn’t take benefits away from those who need them and doesn’t undermine the core mission of social programs and the safety net. On this, the voters have spoken clearly.

Here’s the new ad from labor:

* Dems already signaling flexibility on entitlements: Relatedly, the Wall Street Journal quotes named and unnamed Democrats who are already saying they are prepared to give some ground on entitlement reform. It’s a bit odd that Dems would signal this at the outset, particularly given that Republicans continue to only show flexibility on tax loopholes, and not tax rates — meaning they are not making any big concessions. That said, I wouldn’t place too much stock in this yet, though it bears watching.

* White House cold to idea of going over fiscal cliff? Some liberals want Dems to go over the fiscal cliff, if necessary, and come back and pass what you might call the Obama tax cuts for the middle class. But the Associated Press claims (with murky sourcing) that the White House regards this idea “frostily.”

One really hopes this isn’t true. As Atrios notes:

On January 1 we can start talking about “the Obama tax cuts” and leave the Bush tax cuts, in rhetoric and reality, behind forever.

* GOP opposition to tax hikes cracking? The Times reports that Republicans are suddenly resentful of being constrained by the Grover Norquist anti-tax pledge they signed, as they come to terms with the necessity to raise revenues for a fiscal cliff deal. Rep. Pete King: “I don’t think you can have a rule that you’re never going to raise taxes or that you’re never going to lower taxes. I don’t want to rule anything out.”

Of course, Republicans had to be pushed to this point by a situation in which they don’t have leverage. And again: Until Republicans give ground on raising tax rates they aren’t making a massive concession.

* Election was major blow to Norquist: Relatedly, Dana Milbank has a nice piece detailing the degree to which the election was a major a repudiation of Norquist’s worldview. What’s remarkable is Norquist’s seemingly unshakable self-delusion that Republicans are the ones who retain the leverage in the battle over whether to hike the rich’s taxes.

* Obamacare’s critics just won’t go away: Jonathan Cohn has everything you need to know about the latest effort on the right to undermine the health law, via states refusing to implement exchanges. You’d think the election would have decided this, since voters chose the guy who vowed to continue implementing the law, rather than the one who promised to get rid of it entirely.

* Conservatives claim vindication from 2012 election: It was inevitable: Conservative activists are now claiming that Romney’s loss proves that the GOP must nominate a real conservative next time. No need for the party to moderate on immigration, social issues and taxes, or to keep up with changing demographics! One key question: Whether Republicans who show flexibility on those issues or cooperate with even a scintilla of Obama’s agenda will face 2014 primaries.

* More good economic news: Reuters: “FLASH: U.S. housing starts in October rises 3.6 percent; highest since July 2008.”

* And we won’t have Allen West to kick around anymore: GOP Rep. Allen West will give up his Florida seat, he said in a statement today, after concluding he has run out of ways to legally challenge what he maintained was an inaccurate vote count. West’s seat is a major prize for Dems — he is perhaps the most notorious national Tea Party figure to go down to defeat this cycle.

What else?