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'Fiscal cliff' talks continue despite setback

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    Mike Emanuel reports from Washington

  • Duration 3:21
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-- come down to this again crunch time in our nation's capital.

And the fate of our economy could very well hang in the balance tonight talks to solve the fiscal crisis are continuing to play out in private.

After hitting a major setback we found out about this afternoon.

What they're negotiating right now will affect virtually every single American tax hikes.

That will take money out of millions of paychecks unemployment benefits that could suddenly -- up for millions of people.

Still looking for work and deep spending cuts that could hurt our military with so much at stake it's hard to believe that it's been left for the last minute but it house.

The stakes high time short but even now some lawmakers are expressing at least some optimism.

That a deal can be reached chief congressional correspondent Mike Emanuel -- following all the developments with us tonight.

On the hill Mike it sounds like there won't be a vote tonight at this point because there's no deal at least on the senate side.

Well that's right -- senate majority leader Harry Reid told reporters a few moments ago we should talk to Vice President Biden.

And senate Republican leader Mitch McConnell about progress perhaps some air station there.

Earlier the Democrats cried foul and Republican suggested changing the way inflation is calculated our programs like Social Security.

Reid offered this reaction late -- the day.

I was really gratified to hear the Republican taken there demand for Social Security benefit cuts off the table.

Truth is they should never been on cable to begin life.

There's still significant distance between the two sides but negotiations continue.

-- time left to reach an agreement.

And we intend to continue negotiations.

Meanwhile the past few minutes West Virginia Democrat Joseph mansion introduced a bill called a calm act.

Trying to soften the blow if the country goes off the fiscal cliff.

It would phase in the massive tax hikes over three years and would call on the Office of Management and Budget to prioritize the spending cuts.

Manchin says he's frustrated and try to do something Harris.

You know I was reading that as it was crossing the Associated Press wires it's more than frustration -- almost sounds like desperation at this point as they are losing hope.

The changes CPI that Social Security adjustment that you were talking about which basically.

Changes the way that they configure the cost of living and would make those benefits smaller checks.

It doesn't sound like Republicans are willing to let back up.

It seems like they're willing to let effect -- senator McConnell the Republican negotiator essentially said.

You know no stumbling block should cut off this deal so.

When the Democrats protest his Republican said fine we'll take it off the table but.

It just seems like the talks between Reid and Republican leader got stuck so the Republicans.

Made a call to the bullpen McConnell called an old senate colleague.

Vice president Joseph -- Who want to work with whoever.

Whoever can help if there's no single issue that remains an impossible.

Sticking point.

The sticking point appears to be a willingness.

And interest.

Or frankly the courage to close the deal.

Top aides on the Republican side sound hopeful because they believe Vice President Biden can cut a deal but it may not be tonight Harris Mike Emanuel thank you very much.

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