No Senate vote yet on proposed fiscal cliff deal

Senate leaders cut a deal to avoid the fiscal cliff Biden pitches the plan to Democrats late Monday Obama says more work will be needed and chides Congress for dragging its feet "Take the 84% of your winnings off the table," anti-tax crusader advises GOP

As the fiscal cliff looms, what's your New Year's message to Washington? Go to CNN iReport to share your video.

(CNN) -- Senate leaders and the White House struck a last-minute deal to avert the feared fiscal cliff Monday night, with Vice President Joe Biden headed to the Capitol Hill to pitch the plan to fellow Democrats.

"Happy New Year," Biden, who became the Democratic point man in the talks, told reporters. "Did you think we would be here New Year's Eve?"

A senior Democratic aide told CNN that if caucus meetings went well, a Senate vote could come "within the hour." But the House of Representatives went home long before midnight, meaning nothing will get through Congress before the combination of tax increases and spending cuts lawmakers have been scrambling to head off starts to kick in, at least on paper.

A source familiar with the deal told CNN that the Senate proposal would put off the cuts for two months and keep the expiring Bush-era tax cuts for individuals earning less than $400,000 or couples earning less than $450,000. President Barack Obama has long demanded that the threshold be set at $250,000.

Tax rates on income above those levels would go back to the Clinton-era rate of 39.6%, up from the current 35%, and itemized deductions would be capped at $250,000 for individuals and $300,000 for couples. That would generate an estimated $600 billion in additional revenue over 10 years.

Taxes on inherited estates will go up to 40% from 35%, but the exemption will be indexed to rise with inflation -- a provision the source said was added at the insistence of moderate Democrats.

Unemployment insurance would be extended for a year for for 2 million people, and the alternative minimum tax -- a perennial issue -- would be permanently adjusted for inflation. Child care, tuition and research and development tax credits would be renewed. And the "Doc Fix" -- reimbursements for doctors who take Medicare patients -- will continue, but it won't be paid for out of the Obama administration's signature health care law.

Biden had been in negotiations with Senate Minority Leader Mitch McConnell, R-Kentucky, since Sunday afternoon. Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi, both Democrats, agreed to the plan in calls with President Barack Obama, a Democratic source said Monday night.

In the House, GOP sources said earlier Monday that there's little practical difference in settling the issue Monday night versus Tuesday. But if tax-averse House Republicans approve the bill on Tuesday -- when taxes have technically gone up -- they can argue they've voted for a tax cut to bring rates back down, even after just a few hours, GOP sources said. That could bring some more Republicans on board, one source said.

Economists warn the one-two punch of tax increases and spending cuts, known as "sequestration," could push the U.S. economy back into recession and drive unemployment back over 9% by the end of 2013. Obama had chided lawmakers for their last-minute scramble earlier Monday, hitting a nerve among several Republicans in the Senate.

Latest updates: Final fiscal cliff scramble

"They are close, but they're not there yet," he said. "And one thing we can count on with respect to this Congress is that if there is even one second left before you have to do what you're supposed to do, they will use that last second."

The president warned that if Republicans think they can get future deficit reduction solely through spending cuts "that will hurt seniors, or hurt students, or hurt middle-class families without asking also equivalent sacrifice from millionaires or companies with a lot of lobbyists ... they've got another thing coming."

That irked Republican senators who have been grappling for a deal with the Democratic majority in that chamber. Sen. Bob Corker, R-Tennessee, called the president's comments "very unbecoming of where we are at this moment" and added, "My heart's still pounding."

"I know the president has fun heckling Congress," Corker said. "I think he lost probably numbers of votes with what he did."

Read more: Why your paycheck is getting smaller, no matter what

As Monday's deadline drew nigh, federal agencies were preparing for the possibility of furloughing workers. At the Pentagon, a Defense Department official said as many as 800,000 civilian employees could be forced to take unpaid days off as the armed services face an expected $62 billion in cuts in 2013 -- about 12% of its budget.

Those workers perform support tasks across the department, from maintaining aircraft and weapons systems to processing military payrolls and counseling families. The Pentagon believes it can operate for at least two months before any furloughs are necessary, but has to warn its civilian workforce that furloughs could be coming, the official said.

Read more: What if there's no deal on fiscal cliff

The White House budget office noted in September that sequestration was designed during the 2011 standoff over raising the federal debt ceiling as "a mechanism to force Congress to act on further deficit reduction" -- a kind of doomsday device that was never meant to be triggered. But Congress failed to substitute other cuts by the end of 2012, forcing the government to wield what the budget office called "a blunt and indiscriminate instrument."

In its place, the Senate plan would use $12 billion in new tax revenue to replace half the expected deficit reduction from the sequester and leave another $12 billion in spending cuts, split half-and-half between defense and domestic programs.

Read more: Medicare patients may suffer if country goes over fiscal cliff

Despite Obama's backing, one leading Senate Democrat warned a deal could run into trouble -- not only from House Republicans who have long opposed any tax increase, but also from liberals in the Senate who oppose allowing more high-income households to escape a tax increase.

"No deal is better than a bad deal, and this looks like a very bad deal the way this is shaping up," Sen. Tom Harkin, D-Iowa, said Monday morning. Late in the day, nothing had changed that would cause him to support the package.

Conservative lobbyist Grover Norquist, whose Americans for Tax Reform pushes candidates to sign a pledge never to raise taxes, said the plan "right now, as explained" would preserve most of the Bush tax cuts and wouldn't violate his group's pledge.

"Take the 84% of your winnings off the table," Norquist told CNN. "We spent 12 years getting the Democrats to cede those tax cuts to the American people. Take them off the table. Then we go back and argue about making the tax cuts permanent for everyone."

But Robert Reich, who served as labor secretary in the Clinton administration, said the $450,000 threshold "means the lion's share of the burden of deficit reduction falls on the middle class, either in terms of higher taxes down the road or fewer government services." In addition, he said, the plan does nothing to raise the federal debt ceiling just as the federal government bumps up against its borrowing limit.

And that, Arizona GOP Sen. John McCain told CNN, is likely to be "a whole new field of battle."

"We just added 2.1 trillion in the last increase in the debt ceiling, and spending continues to go up," McCain said. "I think there's going to be a pretty big showdown the next time around when we go to the debt limit."

Biden pitches fiscal cliff deal to Democrats

NEW: Senate leaders cut a deal to avoid the fiscal cliff NEW: Biden pitches the plan to Democrats late Monday Obama says more work will be needed and chides Congress for dragging its feet "Take the 84% of your winnings off the table," anti-tax crusader advises GOP

As the fiscal cliff looms, what's your New Year's message to Washington? Go to CNN iReport to share your video.

(CNN) -- Senate leaders and the White House struck a last-minute deal to avert the feared fiscal cliff Monday night, with Vice President Joe Biden headed to the Capitol Hill to pitch the plan to fellow Democrats.

"Happy New Year," Biden, who became the Democratic point man in the talks, told reporters. "Did you think we would be here New Year's Eve?"

But the House of Representatives went home long before midnight, meaning nothing will get through Congress before the combination of tax increases and spending cuts Congress has been scrambling to head off starts to kick in.

A source familiar with the deal told CNN that the Senate proposal would put off the cuts for two months and keep the expiring Bush-era tax cuts for individuals earning less than $400,000 or couples earning less than $450,000. Taxes on inherited estates over $5 million will go up, and that exemption will be indexed for inflation.

Biden had been in negotiations with Senate Minority Leader Mitch McConnell, R-Kentucky, since Sunday afternoon. Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi, both Democrats, agreed to the plan in calls with President Barack Obama, a Democratic source said Monday night.

Economists warn the one-two punch of tax increases and spending cuts could push the U.S. economy back into recession and drive unemployment back over 9% by the end of 2013. Obama had chided lawmakers earlier Monday and warned that battles over spending still loomed, hitting a nerve among several Republicans in the Senate.

"They are close, but they're not there yet," Obama said. "And one thing we can count on with respect to this Congress is that if there is even one second left before you have to do what you're supposed to do, they will use that last second."

Obama: 'Not how it's going to work' If we go over 'cliff,' what happens? Hopes of fiscal cliff deal dwindling Reid: Boehner running 'dictatorship'

Obama said the plan on the table would prevent a tax increase for the overwhelming majority of Americans, extend the child tax and tuition credits for families, extend credits for clean-energy companies and extend unemployment benefits for 2 million people. But he said lawmakers still have to figure out how to mitigate the impact of the planned cuts.

And he warned that if Republicans think they can get future deficit reduction solely through spending cuts "that will hurt seniors, or hurt students, or hurt middle-class families without asking also equivalent sacrifice from millionaires or companies with a lot of lobbyists ... they've got another think coming."

Latest updates: Final fiscal cliff scramble

That irked Republican senators who have been grappling for a deal with the Democratic majority in that chamber. Sen. Bob Corker, R-Tennessee, called the president's comments "very unbecoming of where we are at this moment" and added, "My heart's still pounding."

"I know the president has fun heckling Congress," Corker said. "I think he lost probably numbers of votes with what he did."

And Sen. John McCain said Obama "sent a message of confrontation to Republicans" with his remarks.

"People have to wonder whether the president really wants issue resolved, or is it in his short-term political benefit for us to go over the cliff," said McCain, R-Arizona.

Read more: Why your paycheck is getting smaller, no matter what

A source familiar with the negotiations said the proposals under discussion would generate $600 billion by ending the Bush-era tax cuts on individuals with incomes above $400,000 and families over $450,000. The top tax rate would return to 39.6% from its current 35%.

The deal would also increase the estate tax to 40% from the current 35% level and cap itemized deductions for individuals with incomes above $250,000 and household income over $300,000, the source said.

In the House, GOP sources said there's little practical difference in settling the issue Monday night versus Tuesday. But if House Republicans approve the bill on Tuesday -- when taxes have technically gone up -- they can argue they've voted for a tax cut to bring rates back down, even after just a few hours, GOP sources said. That could bring some more Republicans on board, one source said.

Read more: What if there's no deal on fiscal cliff

Earlier, a GOP source told CNN that the sticking point in talks was $24 billion in spending cuts being sought by Republicans in place of the $110 billion in automatic spending now set to take effect.

As Monday's deadline drew nigh, federal agencies were preparing for the possibility of furloughing workers. At the Pentagon, a Defense Department official said as many as 800,000 civilian employees could be forced to take unpaid days off as the armed services face an expected $62 billion in cuts in 2013 -- about 12% of its budget.

Read more: Medicare patients may suffer if country goes over fiscal cliff

Those workers perform support tasks across the department, from maintaining aircraft and weapons systems to processing military payrolls and counseling families. The Pentagon believes it can operate for at least two months before any furloughs are necessary, but has to warn its civilian workforce that furloughs could be coming, the official said.

The White House budget office noted in September that sequestration was designed in 2011 as "a mechanism to force Congress to act on further deficit reduction" -- a kind of doomsday device that was never meant to be triggered. But Congress failed to substitute other cuts by the end of 2012, forcing the government to wield what the budget office called "a blunt and indiscriminate instrument."

Despite Obama's backing, one leading Senate Democrat warned a deal could run into trouble -- not only from House Republicans who have long opposed any tax increase, but also from liberals in the Senate who oppose allowing more high-income households to escape a tax increase.

"No deal is better than a bad deal, and this looks like a very bad deal the way this is shaping up," Sen. Tom Harkin, D-Iowa, said.

Conservative lobbyist Grover Norquist, whose Americans for Tax Reform pushes candidates to sign a pledge never to raise taxes, said the plan "right now, as explained" would preserve most of the Bush tax cuts and wouldn't violate his group's pledge.

"Take the 84% of your winnings off the table," Norquist told CNN. "We spent 12 years getting the Democrats to cede those tax cuts to the American people. Take them off the table. Then we go back and argue about making the tax cuts permanent for everyone."

But Robert Reich, who served as labor secretary in the Clinton administration, said the $450,000 threshold "means the lion's share of the burden of deficit reduction falls on the middle class, either in terms of higher taxes down the road or fewer government services." In addition, he said, the plan does nothing to raise the federal debt ceiling just as the federal government bumps up against its borrowing limit.

And that, McCain told CNN, is likely to be "a whole new field of battle."

"We just added 2.1 trillion in the last increase in the debt ceiling, and spending continues to go up," McCain said. "I think there's going to be a pretty big showdown the next time around when we go to the debt limit."

Obama says cliff deal is near; House won't vote today

The fiscal cliff is nigh, but a deal is "very, very close," Senate GOP leader says Obama says more work will be needed and chides Congress for dragging its feet A possible agreement calls for increase in income, estate taxes The fiscal cliff triggers broad tax increases and an automatic $110 billion in spending cuts

As the fiscal cliff looms, what's your New Year's message to Washington? Go to CNN iReport to share your video.

(CNN) -- The feared fiscal cliff was at hand Monday night, with nothing expected to pass Congress before a combination of tax increases and spending cuts starts to kick in at midnight.

A deal to avert that combination, which economists warn could push the U.S. economy back into recession, was "within sight" on Monday afternoon, President Barack Obama said. And in the Senate, Minority Leader Mitch McConnell told members that they were "very, very close" to a deal, having worked out an agreement on taxes.

Sen. Kay Bailey Hutchison, R-Texas, said senators "are hoping to vote tonight" on some package to avert the cliff. But the House of Representatives adjourned without voting on anything Monday -- and Obama's remarks earlier Monday, in which he chided Congress and warned that battles over spending still loomed, hit a nerve among several Republicans in the Senate.

"They are close, but they're not there yet," Obama said. "And one thing we can count on with respect to this Congress is that if there is even one second left before you have to do what you're supposed to do, they will use that last second."

Obama said the deal now on the table would prevent a tax increase for the overwhelming majority of Americans, extend the child tax and tuition credits for families as well as those for clean-energy companies, and extend unemployment benefits for 2 million people. But even then, he said lawmakers still have to figure out how to mitigate the possible damage from sharp spending cuts that are scheduled to start biting January 2, when the federal government reopens after the New Year's holiday.

And he warned that if Republicans think they can get future deficit reduction solely through spending cuts "that will hurt seniors, or hurt students, or hurt middle-class families without asking also equivalent sacrifice from millionaires or companies with a lot of lobbyists ... they've got another think coming."

Latest updates: Final fiscal cliff scramble

That combative talk drew anger from Republican senators who have been grappling for a deal with the Democratic majority in that chamber. Sen. Bob Corker, R-Tennessee, called the president's comments "very unbecoming of where we are at this moment" and added, "My heart's still pounding."

"I know the president has fun heckling Congress," Corker said. "I think he lost probably numbers of votes with what he did."

And Sen. John McCain said Obama "sent a message of confrontation to Republicans" with his remarks.

"People have to wonder whether the president really wants issue resolved, or is it in his short-term political benefit for us to go over the cliff," said McCain, R-Arizona.

Read more: Why your paycheck is getting smaller, no matter what

The nonpartisan Congressional Budget Office has predicted the combined effect of the tax increases and budget "sequestration" -- across-the-board budget cuts set up as part of the 2011 standoff over raising the federal debt ceiling -- could dampen economic growth by 0.5%. That could tip the U.S. economy into a recession and driving unemployment from its current 7.7% back over 9%, the CBO estimated.

The tax proposals under discussion late Monday call for rolling back tax rates on the highest-income earners to Clinton-era levels, increasing the estate tax rate, extending unemployment benefits and potentially putting off the $110 billion in automatic spending cuts called for in the legislation that created the cliff, according to sources close to the process.

A source familiar with the negotiations said the proposal under discussion would generate $600 billion in revenues by ending the Bush-era tax cuts on individuals with incomes above $400,000 and families over $450,000. Their tax rate would be 39.6%, the same as it was in 2000 during President Bill Clinton's presidency. The top income rate is currently 35%.

The deal would also increase the estate tax to 40% from the current 35% level and cap itemized deductions for individuals with incomes above $250,000 and household income over $300,000, the source said.

Read more: What if there's no deal on fiscal cliff

In the House, GOP sources said there's little practical difference in settling the issue Monday night versus Tuesday. But if House Republicans approve the bill on Tuesday -- when taxes have technically gone up -- they can argue they've voted for a tax cut to bring rates back down, even after just a few hours, GOP sources said. That could bring some more Republicans on board, one source said.

Earlier, a GOP source told CNN that the sticking point in talks was $24 billion in spending cuts being sought by Republicans in place of deeper cuts.

"It's like looking under the cushions at this point," the source said. "If we can't find that at this point, we should pack this place up."

As Monday's deadline drew nigh, federal agencies were preparing for the possibility of furloughing workers. At the Pentagon, a Defense Department official said as many as 800,000 civilian employees could be forced to take unpaid days off as the armed services face an expected $62 billion in cuts in 2013 -- about 12% of its budget.

Read more: Medicare patients may suffer if country goes over fiscal cliff

Those workers perform support tasks across the department, from maintaining aircraft and weapons systems to processing military payrolls and counseling families. The Pentagon believes it can operate for at least two months before any furloughs are necessary, but has to warn its civilian workforce that furloughs could be coming, the official said.

The White House budget office noted in September that sequestration was designed in 2011 as "a mechanism to force Congress to act on further deficit reduction" -- a kind of doomsday device that was never meant to be triggered. But Congress failed to substitute other cuts by the end of 2012, forcing the government to wield what the budget office called "a blunt and indiscriminate instrument."

Republicans want a three-month delay, while Democrats seek to forestall the cuts by one year, a Democratic source told CNN. Another Democratic source said the proposed three-month delay "can't pass."

Despite Obama's backing, one leading Senate Democrat warned a deal could run into trouble -- not only from House Republicans who have long opposed any tax increase, but also from liberals in the Senate who oppose allowing more high-income households to escape a tax increase.

"No deal is better than a bad deal, and this looks like a very bad deal the way this is shaping up," Sen. Tom Harkin, D-Iowa, said.

Graham on fiscal cliff: Obama wins 'hollow' political victory

Obama: Fiscal cliff deal 'within sight'

NEW: House GOP sources say they're unlikely to vote on any deal until Tuesday Deal to avert "fiscal cliff" is "within sight," President Barack Obama says Possible agreement calls for increase in income, estate taxes The fiscal cliff triggers broad tax increases and an automatic $110 billion in spending cuts

As the fiscal cliff looms, what's your New Year's message to Washington? Go to CNN iReport to share your video.

(CNN) -- An agreement to avert the "fiscal cliff" of automatic tax increases and spending cuts appears to be "within sight," President Barack Obama said Monday.

The deal would prevent a tax increase for the overwhelming majority of Americans, extend the child tax and tuition credits for families as well as those for clean-energy companies and extend unemployment benefits for two million people, Obama said.

"There are still issues left to resolve, but we are hopeful Congress can get it done," Obama said.

Nevertheless, he did not sound hopeful a deal was imminent, saying he expected to remain at the White House for New Year's Eve while lawmakers used up every last second available to them.

If we go over 'cliff,' what happens? Hopes of fiscal cliff deal dwindling Reid: Boehner running 'dictatorship'

"Keep the pressure on over the next 12 hours or so," he urged supporters. "Let's see if we can get this thing done."

Latest updates: Final fiscal cliff scramble

A GOP source told CNN negotiators are "very close" to a deal. The sticking point is $24 billion in spending cuts being sought by Republicans in place of deeper cuts that would automatically take effect at midnight, according to the source.

"It's like looking under the cushions at this point," the source said. "If we can't find that at this point, we should pack this place up."

A congressional Democratic source agreed that spending cuts are the main hold up now.

But House GOP sources told CNN that they think it increasingly unlikely they'll vote on the proposal before Tuesday.

There's little practical difference in settling the issue Monday night versus Tuesday, the sources said. One exception: if House Republicans approve the bill on Tuesday -- when taxes have technically gone up -- they can argue they've voted for a tax cut to bring rates back down, even after just a few hours, GOP sources said.

That could bring some more Republicans on board, one source said.

"I wouldn't overestimate it, but a handful may be the difference we need," the source said.

Read more: Why your paycheck is getting smaller, no matter what

The proposal under discussion Monday afternoon called for rolling back tax rates on the highest-income earners to Clinton-era levels, increasing the estate tax rate, extending unemployment benefits and potentially putting off the $110 billion in automatic spending cuts called for in the legislation that created the cliff, according to sources close to the process.

A source familiar with the negotiations said the proposal under discussion would generate $600 billion in revenues by ending the Bush-era tax cuts on individuals with incomes above $400,000 and families over $450,000. Their tax rate would be 39.6%, the same as it was in 2000 during President Bill Clinton's presidency. The top income rate is currently 35%.

The deal would also increase the estate tax to 40% from the current 35% level and cap itemized deductions for individuals with incomes above $250,000 and household income over $300,000, the source said.

Read more: What if there's no deal on fiscal cliff

In addition to the tax proposals, also under discussion is a proposal to delay the $110 billion in automatic cuts in domestic and military spending due over the next nine months, a draconian approach called sequester that was created by Congress to address the impact of high deficits and debt on the U.S. economy.

Republicans want a three-month delay while Democrats seek to forestall the cuts by one year, a Democratic source told CNN. Another Democratic source said the proposed three-month delay "can't pass."

Despite Obama's backing, one leading Senate Democrat warned the deal could run into trouble -- not only from House Republicans who have long opposed any tax increase, but also from liberals in the Senate who oppose allowing more high-income households to escape a tax increase.

"No deal is better than a bad deal, and this looks like a very bad deal the way this is shaping up," Sen. Tom Harkin, D-Iowa, said.

Read more: Medicare patients may suffer if country goes over fiscal cliff

If nothing gets done before Monday at midnight, broad taxes hikes will kick in as the Bush-era cuts expire and the deep spending cuts will begin to take hold.

The nonpartisan Congressional Budget Office has predicted the combined effect could dampen economic growth by 0.5%, possibly tipping the U.S. economy into a recession and driving unemployment from its current 7.7% back over 9%.

Graham on fiscal cliff: Obama wins 'hollow' political victory

Forget 2013, nation is counting down to fiscal cliff

NEW: Senate Democrats could balk at the plan, Sen. Tom Harkin warns Negotiators are closer to a deal on the fiscal cliff, sources say The potential deal calls for income and estate tax increases, sources say The fiscal cliff triggers broad tax increases and an automatic $110 billion in spending cuts

As the fiscal cliff looms, what's your New Year's message to Washington? Go to CNN iReport to share your video.

(CNN) -- A possible deal to avert the midnight deadline for the "fiscal cliff" of automatic tax increases and spending cuts began to take shape on Monday, including an agreement to raise the income tax rate on top earners to what it was during President Bill Clinton's last term in office, according to sources close to the process.

But one leading Senate Democrat warned the deal could run into trouble -- not only from House Republicans who have long opposed any tax increase, but also from liberals in the Senate who oppose allowing more high-income households to escape a tax increase.

"No deal is better than a bad deal, and this looks like a very bad deal the way this is shaping up," Sen. Tom Harkin, D-Iowa, said.

Latest updates: Final fiscal cliff scramble

The proposal under discussion calls for rolling back tax rates on the highest-income earners to Clinton-era levels, increasing the estate tax rate, extending unemployment benefits and potentially putting off the $110 billion in automatic spending cuts called for in the legislation that created the cliff, according to sources close to the process.

The two sides are closer to an agreement than they were on Sunday, the sources told CNN. But as the Senate opened for business Monday morning, Senate Majority Leader Harry Reid said negotiators remained apart on key issues.

"There are still some issues that need to be resolved before we can bring legislation to the floor," the Nevada Democrat said.

Even if a deal is reached, it remains to be seen how the GOP-controlled House, which earlier refused to back a $1 million threshold for higher taxes, would respond to any deal.

The proposed agreement would raise rates on top earners to Clinton-era levels, which topped out at 39.6% in 2000 before falling to the current 35% under tax cuts championed by President George W. Bush. It was unclear if the proposal would adjust the tax rates for inflation, but sources said it would spare 98% of Americans from any tax increase.

Just who would pay higher taxes remained a moving target Monday.

Sen. Dick Durbin, D-Illinois, said Republicans have now offered a $450,000 income threshold for individuals and $550,000 for couples. Democrats countered with $360,000 for individuals and $450,000 for couples, he said.

Read more: Why your paycheck is getting smaller, no matter what

However, a source told CNN that the agreement currently under discussion would impose the top tax bracket on individual incomes above $400,000 and household incomes above $450,000.

President Barack Obama and his Democratic allies waded into the debate about the fiscal cliff seeking tax increases on individuals making more than $200,000 and families with incomes above $250,000. He later offered to raise the threshold to $400,000 as part of a larger deal.

Also under discussion is a proposal to delay roughly $110 billion in automatic cuts in domestic and military spending over the next nine months, a draconian approach called sequester that was created by Congress to address the impact of high deficits and debt on the U.S. economy.

Republicans want a three-month delay while Democrats seek to forestall the cuts by one year, a Democratic source told CNN. Another Democratic source said the proposed three-month delay "can't pass."

The discussions occurred a day after negotiations hit a stumbling block over a Republican demand that a deal include changes to how Social Security benefits are adjusted for inflation.

Reid chastised Republicans for raising the Social Security issue, while Senate Minority Leader Mitch McConnell appealed to Vice President Joe Biden to help "jump-start" negotiations after complaining that he had received no response to an offer he put on the table.

Why both sides want to go over the cliff McConnell: We are 'staring at a crisis' Scaled-back deal key to finding fix?

"I want everyone to know I'm willing to get this done, but I need a dance partner," said McConnell, R-Kentucky.

Reid, D-Nevada, had said earlier that McConnell had shown "absolutely good faith" in the talks, but "it's just that we are apart on some pretty big issues."

If nothing gets done before Monday at midnight, broad taxes hikes will kick in as the Bush-era cuts expire and the deep spending cuts will begin to take hold.

Read more: What if there's no deal on fiscal cliff

The nonpartisan Congressional Budget Office has predicted the combined effect could dampen economic growth by 0.5%, possibly tipping the U.S. economy into a recession and driving unemployment from its current 7.7% back over 9%.

Top-level sources on both sides of the negotiations said on condition of anonymity that talks are primarily in the hands of McConnell and Biden, and they are keeping Reid and House Speaker John Boehner, R-Ohio, informed.

On Sunday night, Boehner met with House GOP leaders and told them to sit tight and stick together as he awaits news on whether the Senate can strike a deal.

After the meeting, Rep. Tom Cole, R-Oklahoma, told reporters that Boehner said: "I've stayed out of those negotiations."

"Every time we get involved in them, we sort of get burned, so we're going to let the Senate work its will, see what they do and what they send us, and we'll act accordingly," he said.

As he headed home Sunday night, Reid was asked about progress, and he said: "Talk to Biden and McConnell." On Monday, McConnell declined to say if he was optimistic.

Obama, meanwhile, laid the blame over the stalemate at the feet of Republicans.

"They say that the biggest priority is making sure that we deal with the deficit in a serious way. But the way they're behaving is that their only priority is making sure that tax breaks for the wealthiest Americans are protected," he said Sunday on NBC's "Meet The Press."

"That seems to be their only overriding, unifying theme."

During the interview, Obama said he was willing to consider changing the way inflation is calculated for Social Security benefits, meaning that future Social Security recipients would receive less money over time, even though it was "highly unpopular among Democrats" and opposed by the AARP, the powerful lobby for seniors.

"In pursuit of strengthening Social Security for the long term, I'm willing to make those decisions," Obama said.

"What I'm not willing to do is to have the entire burden of deficit reduction rest on the shoulders of seniors, making students pay higher student loan rates, ruining our capacity to invest in things like basic research that help our economy grow. Those are the things that I'm not willing to do."

Read more: Medicare patients may suffer if country goes over fiscal cliff

But a Democratic source, who did not want to be identified because of the closed nature of the talks, said members understand Obama proposed making inflation adjustments to Social Security benefits as an element of a larger deal that also would change how the federal debt ceiling is adjusted -- an element no longer included in the plans.

Most Democrats oppose the inflation adjustment to Social Security, known as "chained CPI," but many were wiling to go along with it as part of a larger deal, the source said.

Sen. Chuck Schumer, D-New York, told ABC's "This Week" that he thought the chances of a short-term, last-minute deal brokered by Senate leaders were better than 50-50, while Sen. Lindsey Graham, R-South Carolina, told CNN that Obama will probably win the fiscal cliff battle, but it will do little to help the nation's deficit problem.

"The president will get a political victory, a trophy for the president politically, but it will not change our debt situation or reduce our deficit in any meaningful way," Graham said. "It will be a political victory that is hollow in nature when it comes to preventing our country from becoming Greece."

Other Republicans argued Sunday that Obama's plan hasn't done enough to limit spending.

"The president is doing nothing about the addiction that his administration has to spending. He's the spender in chief," Sen. John Barrasso of Wyoming said on CNN's "State of the Union."

Graham on fiscal cliff: Obama wins 'hollow' political victory

Secretary of State Clinton hospitalized with blood clot

The clot was discovered in a follow-up exam related to her concussion Clinton is expected to remain hospitalized for at least the next 48 hours She was scheduled to return to work this week after recovering from the concussion

(CNN) -- Secretary of State Hillary Clinton was hospitalized Sunday after doctors discovered a blood clot during a follow-up exam related to a concussion she suffered this month, her spokesman said.

She is expected to remain at New York Presbyterian Hospital for the next 48 hours so doctors can monitor her condition and treat her with anti-coagulants, said Philippe Reines, deputy assistant secretary of state.

"Her doctors will continue to assess her condition, including other issues associated with her concussion," Reines said. "They will determine if any further action is required."

Reines did not specify where the clot was discovered.

.cnnArticleGalleryNav{border:1px solid #000;cursor:pointer;float:left;height:25px;text-align:center;width:25px} .cnnArticleGalleryNavOn{background-color:#C03;border:1px solid #000;float:left;height:25px;text-align:center;width:20px} .cnnArticleGalleryNavDisabled{background-color:#222;border:1px solid #000;color:#666;float:left;height:25px;text-align:center;width:25px} .cnnArticleExpandableTarget{background-color:#000;display:none;position:absolute} .cnnArticlePhotoContainer{height:122px;width:214px} .cnnArticleBoxImage{cursor:pointer;height:122px;padding-top:0;width:214px} .cnnArticleGalleryCaptionControl{background-color:#000;color:#FFF} .cnnArticleGalleryCaptionControlText{cursor:pointer;float:right;font-size:10px;padding:3px 10px 3px 3px} .cnnArticleGalleryPhotoContainer cite{background:none repeat scroll 0 0 #000;bottom:48px;color:#FFF;height:auto;left:420px;opacity:.7;position:absolute;width:200px;padding:10px} .cnnArticleGalleryClose{background-color:#fff;display:block;text-align:right} .cnnArticleGalleryCloseButton{cursor:pointer} .cnnArticleGalleryNavPrevNext span{background-color:#444;color:#CCC;cursor:pointer;float:left;height:23px;text-align:center;width:26px;padding:4px 0 0} .cnnArticleGalleryNavPrevNextDisabled span{background-color:#444;color:#666;float:left;height:23px;text-align:center;width:25px;padding:4px 0 0} .cnnVerticalGalleryPhoto{padding-right:68px;width:270px;margin:0 auto} .cnnGalleryContainer{float:left;clear:left;margin:0 0 20px;padding:0 0 0 10px} Secretary of State Hillary Clinton speaks about North Africa at the Center for Strategic & International Studies on October 12, 2012, in Washington. From her early days as a lawyer to one of the most powerful people in Washington, here's a look at Clinton at through the years: Hillary Rodham, center, a lawyer for the Rodino Committee, and John Doar, left, chief counsel for the committee, bring impeachment charges against President Richard Nixon in the Judiciary Committee hearing room at the U.S. Capitol in 1974. Arkansas Gov. Bill Clinton helps first lady Rosalynn Carter on a campaign swing through Arkansas in June 1979. Also seen is Hillary Clinton (center background). Bill Clinton embraces his wife shortly after a stage light fell and knocked her down on January 26, 1992. They talk to Don Hewitt, producer of the CBS newsmagazine "60 Minutes." With Hillary, Democratic presidential candidate Bill Clinton waves to the crowd during his victory party after winning the Illinois primary on March 17, 1992. Al Gore, from left, his wife, Tipper, Bill Clinton and Hillary Clinton wave to supporters at the Chautauqua Institution in Chautauqua, New York, on August 23, 1992, after they gave speeches on family values. Clinton gestures at a campaign rally November 3, 1992, in Denver. After taking office, President Bill Clinton chose his wife to head a special commission on health care reform, the most significant public policy initiative of his first year in office. Bill and Hillary Clinton have a laugh together on Capitol Hill in 1993. Clinton pours herself a cup of tea during her testimony to the Senate Education and Labor Committee on health care reform in 1993. Clinton speaks at George Washington University on September 10, 1993, in Washington, during her husband's first term. Clinton, left, waves to the media on January 26, 1996, as she arrives at federal court in Washington for an appearance before a grand jury. The first lady was subpoenaed to testify as a witness in the investigation of the Whitewater land deal in Arkansas. Hillary Clinton looks on as President Bill Clinton addresses the Monica Lewinsky scandal in the Roosevelt Room at the White House on January 26, 1998. Hillary and Bill Clinton arrive at Foundry United Methodist Church on August 16, 1998, in Washington. He became the first sitting president to testify before a grand jury when he testified via satellite about the Monica Lewinsky matter. Clinton shakes hands during a St. Patrick's Day parade in the Sunnyside neighborhood of Queens, New York, on March 5, 2000. Clinton waves to the crowd as she arrives on the stage at the Democratic National Convention on August 14, 2000, at the Staples Center in Los Angeles. Clinton campaigns for a Senate seat at Grand Central Station on October 25, 2000, in New York. First lady Hillary Clinton is sworn in as a senator in a re-enactment ceremony with U,S. President Bill Clinton, from left, nephew Tyler, daughter Chelsea, brother Hugh Rodham, mother Dorothy Rodham and Vice President Al Gore in the Old Senate Chamber on Capitol Hill on January 3, 2001, in Washington. Andrew Cuomo, from left, Eliot Spitzer and Clinton celebrate with the crowd of Democratic supporters after their wins in their various races on November 7, 2006, in New York City. Clinton speaks during a post-primary rally on January 8, 2007, at Southern New Hampshire University in Manchester, New Hampshire. Hillary and Bill Clinton pay a visit to the 92nd Annual Hopkinton State Fair on September 2, 2007, in Contoocook, New Hampshire. Clinton speaks at a fall kick-off campaign rally on September 2, 2007, in Portsmouth, New Hampshire. Clinton addresses a question during a Democratic Presidential Candidates Debate at Dartmouth College in Hanover, New Hampshire, on September 26, 2007. Felipe Bravo, left, and Christian Caraballo are covered with Hillary Clinton stickers in downtown Manchester, New Hampshire, on January 8, 2008. Clinton campaigns with her daughter, Chelsea, on January 1, 2008, in Council Bluffs, Iowa, two days ahead of the January 3 state caucus. Sen. Clinton waves as she speaks to supporters at the National Building Museum on June 7, 2008, in Washington. Clinton thanked her supporters and urged them to back Sen. Barack Obama to be the next president of the United States. Barack Obama and Clinton talk on the plane on their way to a Unity Rally in Unity, New Hampshire, on June 27, 2008. U.S. Democratic presidential candidate Barack Obama watches Sen. Hillary Clinton address the Democrate National Convention at a Democratic supporters' group in Billings, Montana, on August 26, 2008. The two endured a long, heated contest for the 2008 nomination. Sen. Charles Schumer, left, looks toward Secretary of State designate Clinton as committee chairman Sen. John Kerry, center, looks on during nomination hearings on January 13, 2009, on Capitol Hill. Clinton testifies during her confirmation hearing for secretary of state before the Senate Foreign Relations Committee on Capitol Hill on January 13, 2009, in Washington. Clinton dances with a local choir as while visiting the Victoria Mxenge Housing Project in Philippi on the outskirts of Cape Town, Souith Africa, on August 8, 2009. Clinton looks through binoculars toward North Korea during a visit to observation post Ouellette at the Demilitarized Zone seperating the two Koreas in Panmunjon on July 21, 2010. Clinton walks up the steps to her aircraft at sunset as she leaves an ASEAN meeting July 23, 2010, in Hanoi, Vietnam. From left: Marc Mezvinsky, Hillary Clinton, Chelsea Clinton and Bill Clinton pose during the wedding of the young couple at the Astor Courts Estate on July 31, 2010, in Rhinebeck, New York. U.S. President Barack Obama and Clinton hold a moment of silence before a NATO meeting on November 19, 2010, in Lisbon, Portugal. Clinton listens as Turkish Foreign Minister Ahmet Davutoglu (not in picture) makes a brief statement before a bilateral meeting at the State Department in Washington on November 29, 2010. Clinton shakes hands with a child during an unannounced walk through Tahrir Square in Cairo, Egypt, on March 16, 2011. President Barack Obama, Vice President Joe Biden, Clinton and members of the national security team receive an update on the mission against Osama bin Laden in the Situation Room of the White House on May 1, 2011. Clinton checks her PDA upon departure in a military C-17 plane from Malta bound for Tripoli, Libya, on October 18, 2011. Clinton speaks as Hamid Karzai, president of Afghanistan, listens during a news conference at the presidential palace in Kabul on July 7. Clinton arrives at Ben Gurion International Airport on July 15, in Lod, outside Tel Aviv, Israel. Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years Hillary Clinton through the years HIDE CAPTION << < 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 > >> Photos: Clinton through the years How dangerous are blood clots?

Clinton, 65, was suffering from a stomach virus earlier this month when she fainted due to dehydration, causing the concussion.

Clinton spent the holidays with her family last week after working from home.

She was scheduled to return to work at the State Department this week after being sidelined for the past three weeks. Her illness forced her to bow out of testifying December 20 before the House Foreign Affairs Committee on the deadly attack on the U.S. Consulate in Benghazi, Libya. Deputies Thomas Nides and Bill Burns appeared in her place.

The medical setback comes as Clinton is wrapping up her busy tenure as secretary of state, during which she has logged more than 400 travel days and nearly a million miles. She plans to step down from the post if and when Sen. John Kerry -- President Barack Obama's choice to replace her -- is confirmed by the Senate.

Read more: Hillary Clinton fast facts