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Fiscal talks hit major setback as GOP appeals to Biden

Drew Angerer / Getty Images

Senate Majority Leader Harry Reid (D-Nev.) leaves the Senate chamber and heads to a meeting with Senate Democrats on Capitol Hill, Dec. 30, in Washington, D.C. The House and Senate are both in session today to deal with the looming 'fiscal cliff'.

Democrats said that Republicans, led by Minority Leader Mitch McConnell, Ky., are insisting that a deal to resolve the fiscal cliff include what is known as "chained CPI" -- a change in how Social Security benefits are calculated to increase over time. 

Just before a self-imposed deadline at which Senate leaders were set to brief their respective caucuses about a prospective deal, negotiations toward a scaled-back agreement to avoid the onset of automatic tax hikes and spending cuts on Jan. 1 appeared on the verge of breakdown.

-- Reported by Michael O'Brien, NBC News

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