Washington (CNN) – A Democratic source familiar with the talks tells CNN they have hit a “major setback” because Republicans are now insisting that any fiscal cliff deal include “chained CPI," which Democrats consider a “poison pill.”
The Democratic source says they understand the president offered this in talks with House Speaker John Boehner, but Democrats say that was in the context of a larger deal - in exchange for changes to the way the debt ceiling is approached - which is not in the plan anymore.
Chained CPI would change the way Social Security benefits are adjusted for inflation, effectively meaning Social Security recipients would receive less money over the years.
This Democratic source did not want to be identified because of the closed nature of the talks, but was clearly giving the information to CNN to make public the Democrats’ point of view and push the Republicans to give in on this high stakes issue.
The source also told CNN that Democrats are currently “going outside their comfort zone” in these talks with regard to tax rates - keeping tax rates in place for higher income households than the president wants. The source also said Democrats are negotiating with Republicans on extending the current lower estate tax rate, a big issue for many Republicans as well as moderate Democrats.
A Senate Republican leadership source responded by pointing to the president’s comments in an interview that aired Sunday suggesting he is willing to look at chained CPI “in pursuit of strengthening Social Security for the long term.”
Democrats, however, do not see the mini-deal they’re talking about now as a long term prospect with regard to entitlements.
This source further said that they will decide by early Sunday evening whether to pull the plug and put the fallback bill on the floor, a bill that keeps tax rates in place for those making less than $250,000, fixes the Alternative Minimum Tax, includes the so-called Medicare doc fix, and extends unemployment benefits.
Republican Leader Mitch McConnell said on the Senate floor Sunday that he has placed a call to Vice President Joe Biden to see if "he could help jump-start negotiations on his side." Two sources confirmed that McConnell and Biden have spoken.
"I'm interested in getting a result here," he said. "There's no single issue that remains an impossible sticking point. The sticking point appears to be willingness, an interest, or frankly the courage to close the deal. I want everyone to know I'm willing to get this done, but I need a dance partner."
Following his remarks, Senate Majority Leader Harry Reid spoke on the floor, saying he and his staff haven't been able to come up with a counterproposal.
"I had a conversation with the president and at this stage we're not able to make a counteroffer," Reid said.
As for McConnell's comments about working with Biden, Reid said, "I wish them well."
The majority leader added he will continue to work on another offer and will be able to make a new pitch "perhaps as the day wears on."
"I will say this: I think that the Republican leader has shown absolute good faith," Reid said. "It's just that we're apart on some pretty big issues."
Not long after, Reid told reporters that "they're making progress."
"At this stage we don’t have a deal and that’s an understatement," he added.
– CNN's Jessica Yellin and Ted Barrett contributed to this report.
The Democrats gave up on any tax increases, raised the retirement age to 87, cut Social Security payments in half and added fourteen new aircraft carriers to the military budget. Republicans refused to accept the deal unless April was declared "Grover Norquist Appreciation Month."
Wake me when you have a deal. I'm tired of this.
I will be truly MAD if they touch my Social Security.
The repubs just don't get it, but they will in 2014.
Hey... what about the over $10.4 billion dollars (CBO info; 2009) estimated to be spent on illegal immigrants annually? We gonna' cut this???
Do people not know that Obama can only do what the senate and house gives him to sign? It's not Obama, it's the house and senate. Please stop and think about it. If one side tells you it's side two's fault and side two tells you it's side ones fault or both side's one and two tells you it's Obama's fault, they just want you not to blame them. The only ones to blame are the people that voted or didn't vote for new representatives they should't see it as a long term career but a short term service.
Dance with who brings you....hello cliff and hang on!
I love it!
Tax increases for everyone.
Dems are always so happy to raise taxes and are always against tax cuts....let's give them what they want.
It's about time we had America pay for using it's credit card.
Anyone who is surprised by this latest stunt please reply with your email address. I've got a bridge for sale that I'll let go cheap.
Republicans should just vote "present" on whatever gets rolled out there by the dems at this point. Voting present and throwing rocks from the sidelines passed for leadership from democrats and "independents" in 2008 and they are cheering on the same behavior now.
The dems would have no legitimate reason to complain at that point. They will complain and Gregory and the rest will help them do it, but we've been on the "they did it first" template of moral and political leadership from both parties for the better part of 2 decades now so why not take it down one more notch for everybody. That's about the only way to get this president to be held accountable for anything at this point.
OK – we'll make sure very well-off people continue getting a tax discount, and we'll pay for it by chisleing Grandma down to Mac'n'Cheese.
Vote. Out. The. Rethugs.
In other words do nothing, kick the can - how vapid are All these people
More of the same, different day. Somebody is always trying to pull a bait and switch. It is all too clear that both sides want to go over the cliff.
Why are the Democrats suddenly so in love with the Bush tax rates??
Look...let's all just pay more and be done with....we don't need money to pay bills, for food or clothes for our kids....if the government needs it...then take all we have......it's a shame that those making six figures can't agree on anything in Washington....well done people...I'm sure I speak for many US citizens when I say you have all done one heck of a job!!!! Keep up the good work!!!!!
the GOP is hitting the SENIORS, next they will hit MEDICARE then they will hit the disabled, then MEDICAID, then VETERANS, then FARMERS (being held up) and then the GRAND BARGAIN – the rest of the 98%. Since nobody will be letf the will then hit each other. Hopefully we can survive the next two years when the GOP will be no more.
blah, blah, blah... etc. I just want to scream !
I feel like every time the economy starts to look like it is recovering, congress can't help itself from throwing some completely contrived stumbling blocks in front of it. Last time it was the debt ceiling, now this.
My solution? Duct tape. We need 535 rolls of it. We need to use it to make sure we don't hear anything out of congress until the economy is strong enough to handle their stupidity.
Our government would have to put forth heroic effort to be anymore useless than they already are.
If politicians from BOTH parties would have kept their greedy hands OUT of the Social Security General Fund in the first place, the system wouldn't be in nearly as bad a shape as it is now. But they just couldn't resist that huge pot of money, as their eyes all filled with pork.
Go with the alternative bill..... or just go over the cliff.
CPI now in the mix! What's next? Good lord get this thing over.
Republicans continue to work on destroying the US economy so to bring Obama down.
(In a few weeks they will hold the full faith and credit of the US hostage until they get their way - In other words, they are not holding a gun to the heads of the democrats but rather to the entire American economy. Last time they did this our credit rating dropped.)
Enough of the Republican "head games," they are not bargaining seriously, and obviously do not care about the American people. They are using the Presidents good faith negotiating, solely, as a position to grandstand their lame party politics. I call upon Our President and our democratic leaders to pull the plug on this charade, and bring the President's initial plan to the Senate floor for an up or down vote by all members. Then, if the Republicans still want to use the American people for their extremist political posturing, they can do so only at their own political peril. That is the only way to reason with these malcontents.
Fed Tax Revenue 2,170,000,000,000
Fed Budget 3,820,000,000,000
New Debt 1,650,000,000,000