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.
keep higher taxes for wealthy and reduce social security benefits for the elderly; sounds like a republican plan to me; think i will throw up!!!
So-our great leader is pulling the strings-in phone calls to Reid-he is in charge-so if it falls apart-Obama is responsible!
The GOP are killing this country. WOW.
Lock them in a room with no food or water till a deal is done, lets see how fast it happens.
I don't want Social Security tampered with so that greedy Republicans can keep their cushy tax breaks. How could they possibly think that Americans want this sorry deal!
Republicans are getting ready for the setback of the century to their party
The Social Security administrator has stated on their website that changes need to be made to Social Security to keep it solvent. The only reason Social Security cuts are controversial is that it the general public has not been made aware of the major issues that are facing the system. It will not continue to function as is.
Have fun with your fiscal cliff. I'll be watching the country burn from the Canadian border.
Imagine that, Democrats are pointing the finger at Republicans......what's new?
YOU PEOPLE HAVE A JOB TO DO NOW SHUT UP AND DO IT FOR PETE'S SAKE!
I wish there was a way to fire every last one of them! There is a word that should be with you politician's vocabulary of understanding....it's called compromise. Meet each other 50-50 on all these sticking points. No one will be complete happy and no one will be completely unhappy....well, heck yeah they will. The little boys and girls don't get their way 100% of course they will be unhappy. But at this point PUT US FIRST!!!!! That's what we pay you to do! GROW UP AND DO YOUR JOB.....take folks off the street to replace everyone of you....average working joe's and watch us figure out how to compromise to keep from falling off a cliff for pity's sake. We'll be glad to teach you how to do your jobs!
The GOP lackeys for the ruling 1% class now want to steal from the last lock box- the social security system that the middle class has paid for. It is not for the taking. Please resign and get jobs with your masters and stop driving our country into decline. Do yo have any idea how you are destroying your party? Get some principles! Outrageous and anti patriotic. Shame on you!
Jeez, can we please get it together. Both have to make some concessions people!
All this consternation and even a negotiated budget "solution" still won't fix our national debt problem. The Bush tax cuts need to expire for *everyone*. Then, for the super rich, rates need to return to 66-70% which is at the lower-end of the 1932-1981 historical levels and the "optimal tax" rate according to economists. Spending needs to be drastically cut on defense (20% of the budget), and, to a lesser extent, medicare (13%) and medicaid (8%). Anything less is delaying the inevitable.
Come on repubs and dems, you ALL have to go outside of your comfort zones to get this done. Lower tax rates for the vast majority of Americans and deep cuts in ALL programs have to be part of this deal. Get it done or resign!
lady's and gentalman we will now be in a great depression greater then then that of 1929.
What's next? The GOP will want to reinstate slavery, repeal the 20th Amendment, and do away with child labor laws as part of the deal too?
Republicans are always trying to destroy Social Security and they'll never give up trying until they succeed. The working class needs to let your Senator know we don't want this. If we can fight trillion dollar wars, we can adequately fund Social Security.
Those extremists,... Citizens will get sick of Congress,...Congress will get sick of dealing with themselves and the citizens,.... And they ending electing a dictator,... A Cesar,... Much like in Roman times.
When those elected to compromise to come to a come solution don't want to do it,.. Is when democracy,.. And will eventually die.
Hey you bunch of idiot Republicans! LEAVE SOCIAL SECURITY ALONE!!!!! Millions of senior citizens have paid into that fund for years so we would have something to fall back on in our later years. If you want to cut something, cut your salaries. You are assuring that no Republican will ever get elected again.
Know why it is so easy to insist on Medicare cuts and such...they won't be needing it. They all have cushy government pensions that are so much higher than everyone else's which they "earned" after one term while most of American must work twenty years to receive. We paid into Medicare for many many years but now its called anything but what we earned. I am disgusted with Congress and this arguing. They certainly do not have the average citizen at heart. Why must the military be the first to not receive a paycheck? They earn a shoe lot less and are putting their life and limbs on the line everyday.. Why doesn't Congress pony up their checks? Oh right, they need more money
It is time now to take our world back from those who pray on us!!! The world does not belong to a few but to all.
If there is no deal, or even if there is a deal. I hope the entire world wakes up and there are massive protests, demands and that the government, kings, emperors and dictators kneel to us the people.
Peace to all and time for change is now!!!!!!!!!!!!!!!!!!!!!!!!
Hope the U.S follows suite, the bad thing in this country is that, no matter what, the citizenry bends to its governors requests.
I for one, will be voting against each of my congressional members when their terms are up. My part or not. It doesn't matter. They are all to blame.
Where is the compromise on the Dems part? If they aren't willing to incorporate the CPI change, how about nixing the unemployment benefits? After all, either option is directed at non-producers, which seems more fair than sticking it further to us folks out there working.
The Republicans have NOT shown good faith during these negotiations. They are hell bent on using the poor and seniors as hostages in their sick little game. They are for the rich and the rich alone. It's time we take back their huge salaries for life and their retirement benefits. Let's see how they live on a middle class salary.
More than clear: GOP will do everything to frustrate fiscal cliff. Everything. They just cannot deal with the fact that Obama got elected.