Source: Fiscal cliff talks see major setback
December 30th, 2012
02:06 PM ET
5 years ago

Source: Fiscal cliff talks see major setback

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.

Filed under: Fiscal Cliff • Senate
soundoff (126 Responses)
  1. Gene

    Looks like a slanted article to me. Whatever happens will be blamed on the GOP.

    December 30, 2012 03:57 pm at 3:57 pm |
  2. conrad

    goodbye Republicans 2014

    December 30, 2012 04:05 pm at 4:05 pm |
  3. tom

    Why would McConnell wait till the last minute to get a deal. It is appears that he is concerned about his up coming election. It does not take a mental heavyweight to see McConnell's attempt to show he can be reasonable after 4 years of obstructive policies. You add Boehner' saying he wants a majority of the majority when he knows the Senate bill waiting in House would pass a vote.

    December 30, 2012 04:05 pm at 4:05 pm |
  4. Wayne

    Obama.....Make the GOP an offer they cannot refuse.... DOUBLE THE TAX RATE ON THOSE MAKING OVER $250K A YEAR!!!!

    December 30, 2012 04:05 pm at 4:05 pm |
  5. KBNJ

    Obama's plan: No reduction in debt, virtually no reduction in deficit, no control over debt ceiling – the Grinch who stole our kids' future. The cliff – a Seasick Crocodile. "In a choice between the two of you, I'll take...The Seasick Crocodile!"

    December 30, 2012 04:06 pm at 4:06 pm |
  6. jimtwest3

    In the 80's, President Regan made the statement that "Social Security has nothing to do with the Federal Budget deficit... by law Social Security is a completely separate trust fund and not a part of the Federal Budget". It is offensive and not logical for Republicans today to tie Social Security cuts to a deal on balancing the Federal Budget. By law, the Social Security Trust fund is not part of the Federal Budget. I can't understand why people vote for today's Republican Party. Today's Republican Party is bought and paid for. Instead of focusing on rebuilding out economy, and creating jobs, all the Republican Party wants to do is protect tax breaks on millionaires and cut Social Security and Medicare. If ever a political party deserved to be voted into oblivion, today's Republican Party should be voted out of office and put in the history books as a failed party.

    December 30, 2012 04:09 pm at 4:09 pm |
  7. martinoshea

    The GOP doesn't want millionaires to pay the taxes they used to pay, but does want Social Security recipients to receive less money over time.

    December 30, 2012 04:10 pm at 4:10 pm |
  8. Thinks2010

    Is anyone surprised by this? This Congress and these two parties have been playing this same poisonous game for years now. They remain so beholden to their donors and lobbying groups and so self-centered and myopic that they cannot see past their own political gamesmanship to focus on the needs of this nation. It is pathetic that a nation founded by great thinkers focused on the greater good is now in the hands of these selfish mental midgets. I have never felt so much disgust for Congress as I feel now.

    December 30, 2012 04:12 pm at 4:12 pm |
  9. Cliff F.

    GOP: Grand Ole Poison!

    December 30, 2012 04:16 pm at 4:16 pm |
  10. empresstrudy

    I'm not worried. Obamatrons will be living it up. I can't wait for Ed Schultz to start screaming at the 20% unemployed to remember to march around with their protest signs because that will feed them.

    December 30, 2012 04:16 pm at 4:16 pm |
  11. Alyx Smith

    Why on earth do the Republicans want to continue to hurt the elderly. Now they want CPI included which will reduce how inflation is figured for Social Security Recipients. I get a little over $700. mo from Social Security. My father is on Social Security and he just got an $18.00 cost of living raise on his Social Security. You can't even get a tank of gas for that. I just don't get it. Of course Congress and the House are set for life drawing salaries just short of $200K per year with lifetime benefits. So why should they even care about the poor or elderly. Shame on our government!!!

    December 30, 2012 04:16 pm at 4:16 pm |
  12. jane boucher

    Apparently you did not read the cuts obama made and boehner walked away from,. it was balanced more revenue, more cuts and changes in soc security CPI, instead now the gops want the cpi TO JUST PAY FOR THE rich folks increase in taxes. figures.

    December 30, 2012 04:16 pm at 4:16 pm |
  13. Blah blah the wheel's off your trailer

    Why should the President and the Democrats negotiate with republicans who squandered a surplus, gave us two foreign wars costing $5.2 trillion, a housing crisis, record unemployment, a broken financial infrastructure and the worst economic meltdown since the Great Depression? Let's face it, the GOP has no answers and no solution to economic growth and deficit reduction.

    December 30, 2012 04:17 pm at 4:17 pm |
  14. Al

    Personally, I HAVE HAD IT...right now there is nothing they can do at this time that gives me any confidence in our government.

    December 30, 2012 04:20 pm at 4:20 pm |
  15. What?!?!

    READ THE ARTICLE PEOPLE – 2nd paragraph – the dems were on board with chaining CPI if the repubs gave in on the debt ceiling. Sounds like the dems will only cut costs if its easier to spend more.... We are all suckers, repubs and dems alike.

    December 30, 2012 04:25 pm at 4:25 pm |
  16. jackarouu

    "The republicans made me do it"
    "The republicans made me do it"
    "The republicans made me do it"..............

    December 30, 2012 04:25 pm at 4:25 pm |
  17. ST

    Hello republicans, you can keep your poison and take it yourselves. We are embracing ourselves for the fiscal fiasco come 2013, if that is your New Year wishes to each and every individual citizen.

    December 30, 2012 04:28 pm at 4:28 pm |
  18. RealAmaerican

    Today's GOP has done more damage to this country than a thousand Osama Bin Ladens.

    December 30, 2012 04:30 pm at 4:30 pm |
  19. Michael

    So I have get this straight in my head. When I took my job, the SS benefit was considered 1/3 of the total retirement package. Now, I work for 30+ years putting into the SS fund every pay period because it's is required by law. But when my time comes to recoup what I've contributed for my retirement, it's going to be significantly reduced. What gives? Why punish the middle class, the poor and the elderly who have faithfully put into the system? (I think we've been duped by the rich...). I gotta find a more egalitarian country where taxes might be high, but people are cared for becuase it's a priority. I am getting really tired of this.

    December 30, 2012 04:30 pm at 4:30 pm |
  20. Anonymous

    Nearly every politician is afflicted with narcissism. They need the qualities associated with that ailment to run for office. Then the same qualities preclude compromise and generate conflict.

    December 30, 2012 04:33 pm at 4:33 pm |
  21. kittycreek

    Americans are waiting to see how bad the Republicans are going to get away with hurting 98% of the population with this deal and then when the debt ceiling issue arrives they will hurt us again. How bad must we suffer while they live their comfortable lives without worry. They hold the economy of the world hostage while they play childish games. They pretend they are afraid we will be "like Greece" but while taxes are lower than they have been in 50 years, they blame the debt on Social Security and Medicare and say "We don't have a revenue problem; we have a spending problem." If Republicans were worried about leaving our children with debt, or were worried about our children at all; they would not be killing our economy with obstruction and lies. WE HAVE A REVENUE PROBLEM AS WELL AS A SPENDING PROBLEM.

    Another tiresome argument is that people who live in places where the cost of living is high; then $250,000 is not rich. Well here's the thing about that, if a family of four has $250,000 of taxable income, they will have a very small rise in taxes because they only pay more on the part of their taxable income that is above that and it is only a 3% increase. A quarter of a million dollars per year is not rich, but it's a whole lot more than most Americans are forced to live on. Get real people!

    December 30, 2012 04:33 pm at 4:33 pm |
  22. CAWinMD

    The true tragedy on this is that on spending cuts, the two sides were only $150 billion apart over 10 years. That's $15 billion a year - less than 0.3% of the yearly budget. And Boehner walked away from it. That's just about criminal, or at least gross incompetence on his part.

    Let's just go over the cliff. That way the tax increase side is taken care of, and Republicans get the blame for not protecting the vast majority of Americans as they rightly should. To make it up to the rest of America, Republicans will want to pass something that returns the middle class back to their previous tax status. Obama should tell them that the price tag for that agreement is a debt-ceiling extension for two years. Obama tried to protect the middle class, Republicans will have none of it. Great. Let them lay in the bed they've made, unless they're willing to pay the price to be saved from themselves.

    December 30, 2012 04:34 pm at 4:34 pm |
  23. noteasilyswayed

    More grandstanding by the Republicans to try to get some concessions at the last minute; after they rejected the President's proposals last week in order to please their extremists, now they are screwed because the avalanche of protests they are going to receive if they do not extend the tax cuts to the 98% of the population will ensure that very few of them will be re-elected the next time around. The party of the Greedy Old Pukes

    December 30, 2012 04:35 pm at 4:35 pm |
  24. pdenorte

    Positioning 'Obama won' seems like the GOP preparing post-fiscal cliff position that after all, Obama is the President, the Democrats control the what happened is in Obama's court.

    December 30, 2012 04:37 pm at 4:37 pm |
  25. rschier

    "Whatever happens will be blamed on the GOP."

    As it rightfully should be.

    December 30, 2012 04:37 pm at 4:37 pm |
1 2 3 4 5 6