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.
Dems should just wait until Thursday and get whatever they want.
repos will be the cause of us going over the cliff and should be held accountable.
I'm curious. Is the average Republican voter pleased about the positions being taken by the party? Do they want to cut social security benefits and medicare in exchange for not taxing rich people? Also, what's the fuss about taxing inheritance? It seems the only reason you should care about this is if you are looking to inherit a lot of money.
So let's kick the can down the road a little bit farther said an "Unnamed" source regarding our real problems
If you want to rework SS a little bit, that's fine....but make that a separate and carefully-researched discussion instead of ram-rodding something at the last minute.
so what else is new.
What a surprise...the GOP wants to punish the elderly, widows, children and the infirm in exchange for tax breaks for the wealthy!
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....
I'm confused why its the republicans fault because Obama does not get everything he wants?
I've pretty much always been of the opinion that, in times like these, where the security and/or stability of the country is at stake, that the President, whoever he or se is, whichever party they are, should order that Congress be LOCKED INSIDE the Capitol until they come to an agreement.
The Debt Ceiling Crisis shows emphatically that a bunch of people should not have the power or ability to train wreck the Legislative Process for their own political ends.
I quess they think the cost of living does not go up for the seniors .The cost of living must must be so high for the millionares that God forbid they pay a little more.I wonder where these so called leaders we have were ,when Bush kept coming to the though for more money for his mistaken wars, knowing full well they were not included in the budget.
Our leaders are a joke and the sad part is that we the people are so dumb we keep putting them back in.
Goodness gracious. The Dems don't want to include the chained CPI even though the President has already put it on the table!!!! I receive SS retirement and am not against a chained CPI as it is a more rational index. Are the Dems really ready to show they are as stupid as the Republicans. Obama talked about "shared sacrafice". So let's have a deal that actually includes spending cuts as well as increased taxes. The "cliff" is starting to look like the most rational approach proposed yet. Please Congress use some common sense !!!!!!
Republicans cannot understand that when they walk away from a potential deal, such as Bohner has repeatedly done, that those terms come off the table. You cannot play your hand, then ask for it back because you played it badly. Suck it up, boys. It's time you got out of those tea pants and put on your big boy pants.
Well, 3p.m. EST has come and gone. Where are we?
What? You mean Obama playing Blamer In Chief isn't helping get things done. Obama is the Blamer In Chief.
How is the GOP any different than a terrorist who holds innocent people hostage? They will watch seniors and the disabled starve before they let their rich donors spend one dime more!
the GOP can take the "poison pill" and choke on it!
So in short, democrats are completely against fixing the long term debt problem. Well, no surprise there.
The Hill represents the worst of humanity in their greed. We The People are ashamed of you all. We are sad and tired of all the spin and lies
Chained CPI? I'll tell you what – YOU live on my social security and I will live on your pension!
So, repubobstructionists now want a deal they rejected. It seems they're always playing bait and switch then want to go back. Haven't they yet learned that they should take the deal they're offered when its offered? Nope. Repubobstructionists are just too stupid or insane – either way they keep doing the same thing expecting a different result.
Stick to your guns Democrats... they cried all the last 4 years about deficits... make them do something about it.
Anyone else burning out on Democrats breathlessly running to the press to blame Republicans for everything. Chained CPI? Yes, please, now shut up and get back to work.
You monger war around the world and class war at home you are the worst possible representation of leadership in all of humanity
Whats it going to be?