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'Fiscal cliff' negotiations stall on Capitol Hill

5:42 PM, Dec 30, 2012   |    comments
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Susan Davis and David Jackson, USA TODAY

WASHINGTON - President Obama said he remains hopeful Congress will reach a deal to avert the "fiscal cliff," but negotiations stalled Sunday afternoon on Capitol Hill where Senate leaders are trying to find a compromise to avert year-end tax hikes and spending cuts that threaten economic recovery.

"At this stage, we are not able to make a counter-offer," said Senate Majority Leader Harry Reid, D-Nev., in response to the most recent offer made by Senate Minority Leader Mitch McConnell, R-Ky., on Saturday evening. "Perhaps as the day moves on I will be able to."

Reid added: "We're apart on some pretty big issues."

Negotiations hit a wall when McConnell asked to include a provision to change the way cost-of-living adjustments are made for Social Security benefits, according to a Senate Democratic aide who isn't authorized to discuss the status of negotiations and spoke on condition of anonymity. Republicans broadly support the proposal, which could ease passage for a final legislative package in a divided Congress, but the proposal is a non-starter for Democrats.

"I am concerned about the lack of urgency," McConnell said, because he has yet to receive a counteroffer from Reid. "I want everyone to know I'm willing to get this done, but I need a dance partner."

McConnell said he made a call Sunday to Vice President Joe Biden "to see if he could help jumpstart negotiations on his side." McConnell and the vice president have had a strong working relationship in previous fiscal negotiations. Reid said he also spoke Sunday with the president.

Congress reconvened Sunday with just one day remaining before all of the George W. Bush era tax rates expire and the first $100 billion in scheduled $1.2 trillion in across-the-board spending cuts take effect at the start of the new year.

If they fail to reach an agreement, Reid is prepared to bring to the floor Monday a stripped down bill to extend the middle class tax rates and unemployment benefits. If it passes the Democratic controlled Senate, it would be sent to the Republican controlled House, where passage is not guaranteed because of GOP opposition.

"Now the pressure's on Congress to produce," Obama said Sunday on NBC's Meet The Press in his first appearance on the show since 2009.

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