GOP backs off, clearing way for more talks
Published: December 30, 2012 06:59PM
Updated: December 30, 2012 06:06PM

Washington • Negotiations over a last-ditch agreement to head off large tax increases and sweeping spending cuts in the new year appeared to resume Sunday afternoon after Republican senators withdrew their demand that a deal must include a new way of calculating inflation that would lower payments to beneficiaries programs like Social Security and slow their growth.

Senate Republicans emerged from a closed-door meeting to say they agreed with Democrats that the request — which had temporarily brought talks to a standstill — was not appropriate for a quick deal to avert the tax increases and spending cuts starting Jan. 1.

To hold the line against raising taxes on high-income households while fighting for cuts to Social Security was “not a winning hand,” Sen. John McCain, R-Ariz., said.

The concession could be a breakthrough, but Senate Republicans were still balking at an agreement on Sunday, adopting a new talking point that Democrats want to raise taxes just to increase spending, not to cut the deficit. That concern appears to center on a Democratic proposal to temporarily suspend across-the-board spending cuts to military and domestic programs as talks resume on a larger deficit deal.

The demand for the new way of calculating inflation, known as “chained CPI,” issued at 7:10 p.m. on Saturday, had stopped talks cold. Sen. Mitch McConnell, R-Ky. and the Republican Senate leader, went to the Senate floor a little after 2 p.m. Sunday to say that Republicans had made their last offer and had yet to receive a reply.

“I’m concerned about the lack of urgency. I think we all know we’re running out of time,” McConnell said.

Sen. Harry Reid, D-Nev. and the majority leader, responded that “at this stage, we’re not able to make a counter offer.” He said that McConnell had negotiated in good faith but that “we’re apart on some pretty big issues.”

McConnell said he had made an emergency call to Vice President Joe Biden to get the talks started again. The two spoke twice, and the White House dispatched the president’s chief legislative negotiator, Rob Nabors, to the Capitol to meet with Senate Democrats.

Talks foundered after Republicans dug in in an effort to get the largest deficit reduction deal they could get in the time remaining, according to numerous Republican and Democratic officials familiar with negotiations.