“As you can see in our Fiscal Cliff liveblog the negotiations are at an impasse, reportedly because the Republicans have tossed in a demand that Social Security benefits be cut.
They don’t actually call it a “cut” but rather a change to how benefits are indexed. Currently benefits rise every year in step with CPI. The GOP wants it to rise in step with an alternative measure of inflation called the Chained CPI. Dylan Matthews at Wonkblog has a good in-depth explanation of how the Chained CPI works, but the gist is that the Chained CPI tries to take more into account how people substitute cheaper/inferior products when the price of their preferred goods rise…”
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