DENVER (CBS4) – Senate negotiators are pessimistic about avoiding the fiscal cliff. Talks seem to have broken down but there is a contingency plan already in the works.
The latest from Capitol Hill is a significant snag in negotiations Sunday afternoon. It’s mainly over tax cuts and who should get them.
Republicans proposed a change to Social Security benefits what they call “chained CPI” to be part of the new deal, meaning big cuts to Social Security payments. Democrats swiftly rejected that deal, putting negotiations back to square one.
Senate Majority Leader Harry Reid took the podium to announce the latest freeze in negotiations.
“We are apart on some pretty big issues,” he said.
“I’m concerned about the lack of urgency here. I think we all know we are running out of time,” Senate Minority Leader Mitch McConnell said.
After yet another setback, President Obama is poised to act if no agreement is made before the deadline expires Jan. 1.
“(If) taxes on middle class families do in fact go up on Jan 1., then we will come back with a new Congress on Jan. 4 and the first bill that will be introduced on the floor will be to cut taxes on middle class families,” Obama said.
Colorado Rep. Jared Polis says that plan is already well under way.
“The other alternative would be simply to renew the tax cuts for people making $250,000 or less,” Polis told CBS4. “That’s a stand-alone bill that we have in the House the Senate that has already passed that can go right to Obama’s desk.”
In Colorado, some remain optimistic.
“Some people work well under deadlines. So who knows, maybe they will come to some agreement,” Broncos fan Beth Pappas said. “I am definitely hopeful that we can figure it out and I’m proud to be a citizen here, proud to be a Bronco fan … I am hopeful they will do the right thing in Washington.”
“They will resolve it at the 12th minute. They’ll get it together and they’ll do something,” Dennis Pappas said.
If no deal is reached before midnight Monday, the expiration of the Bush administration tax cuts as well as $110 billion in spending cuts will kick in. Obama says that could cost the average middle class family about $2,000.