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Fiscal cliff: 48 hours to go and Senate negotiations slow to a crawl

A late-breaking Republican demand to cut Social Security benefits through an alternative method of calculating inflation adjustments has put negotiations at an impasse.

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Senate Majority Leader Harry Reid (D-NV) speaks with the media as he leaves the Senate Chamber Sunday afternoon. Efforts to prevent the economy from tumbling over a "fiscal cliff" stalled as Democrats and Republicans remained at loggerheads over a deal that would prevent taxes for all Americans from rising on New Year's Day.

Mary Calvert/REUTERS

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UPDATE: Senate majority leader Harry Reid told the Senate at 5:48 p.m. Sunday that Senate Republicans have dropped their call for Social Security benefit cuts, or “chain” CPI, as part of a deal to avert the fiscal cliff. There is still “significant distance” between the two sides, he said, but “there is still time left to reach an agreement." The Senate will come in at 11 a.m. Monday, when the majority leader expects to make "further announcements."

Fiscal cliff negotiations hit a wall late Saturday night, but it took Senate Republicans about 15 hours to figure that out.

Typically, 11th hour negotiations are marked by a flurry of offers and counteroffers, all-night staff negotiations, phone calls, and huddles in back rooms littered with pizza boxes and diet soda cans.

That’s not happening, say staff close to the negotiations. Senate Republicans made their last offer about 7:10 p.m. Saturday. Democratic staff for majority leader Harry Reid promised a response by 10 a.m. on Sunday. Nothing came.

Instead, word leaked to the press that a late-breaking GOP demand to cut Social Security benefits through an alternative method of calculating inflation adjustments as “chained” CPI [Consumer Price Index] had put negotiations at an impasse. It was a poison pill, a show-stopper, Democratic aides told reporters.

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