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Sunday, Dec 30, 2012 8:34 PM UTC

GOP demands Social Security cuts, setting back fiscal talks

Although Obama made similar proposal within a broad package, Dems reject the measure as part of scaled-back deal

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Topics: Social Security, Republican Party, U.S. Senate, Mitch McConnell, Harry Reid, Fiscal cliff, U.S. Economy, ,

GOP demands Social Security cuts, setting back fiscal talksSenate Minority Leader Mitch McConnell of Ky. walks to the Senate floor on Capitol Hill in Washington (Credit: AP Photo/Susan Walsh)

In what Democratic aides told reporters was a “major setback” in fiscal cliff negotiations, Republicans proposed throwing a Social Security cut into the scaled-back deal Congress is attempting to cobble together in advance of the New Year deadline. As things stand at the time of writing, negotiations are close to breakdown.

Aides to Republican Senate Minority Leader Mitch McConnell presented the Social Security proposal, which included a method of calculating benefits with inflation. The plan would lower cost of living increases for Social Security recipients. Democrats were swift to reject the offer.

A Democratic aide told ABC News that the proposal was a “poisoned pill” in the current negotiations. However, it should be noted that President Obama has suggested a similar proposal within the context of negotiations on a broad deficit-reduction deal. Such a measure had been taken off the table in discussions over a scaled-back, short-term agreement.

Senate Majority Leader Harry Reid said on the Senate floor Sunday, “We’re willing to make difficult concessions as part of a balanced, comprehensive agreement but we’ll not agree to cut social security benefits as part of a small or short-term agreement, especially if that agreement gives more handouts to the rich.”

As such, the Republican move has brought negotiations close to breaking point. According to the Hill, a Democratic aide noted of the Senate Majority Leader’s reaction to the Social Security proposal, “Sen. Reid was personally taken aback and hugely disappointed to hear the new element of the Republicans latest offer,” said the aide. “We’re further apart than we were 24 hours ago.”

Reid said Sunday he remains “cautiously optimistic” that a deal can be made as the cliff’s edge approaches.

The president has said that Democrats will simply call an up-or-down vote on his initial proposal, which prevents tax hikes on all but those incomes above $250,000, and force the issue if talks break down and the deadline gets too close.

Natasha Lennard is an assistant news editor at Salon, covering non-electoral politics, general news and rabble-rousing. Follow her on Twitter @natashalennard, email nlennard@salon.com. More Natasha Lennard.

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