( CNN ) -- Senate Republicans and Democrats remain far apart in their effort to avert a year-end combination of spending cuts and tax increases that could trigger a new recession , Majority Leader Harry Reid said Sunday . `` There 's still significant distance between the two sides , but negotiations continue , '' Reid said as Congress held a rare Sunday session in a bid to avoid the so-called fiscal cliff . `` There 's still time left to reach an agreement , and we intend to continue negotiations . '' No votes will be held Sunday , but Reid said there may be further announcements when the Senate reconvenes Monday morning : `` I certainly hope so . '' With barely a day left to avert what economists predict will be a one-two punch to the U.S. economy , talks hit what a Democratic source called a `` major setback '' when Republicans insisted that changes to how Social Security benefits are adjusted for inflation be included . Republicans have dropped that demand , but `` they never should have been on the table to begin with , '' said Reid , D-Nevada . Using what 's known as `` chained CPI '' would change the way Social Security benefits are adjusted for inflation , meaning that future Social Security recipients would receive less money over time . Democrats consider this prospect a `` poison pill , '' the source said , and GOP senators said later it would n't be included . `` If that is a show-stopper for the majority leader , we will take that off the table , '' New Hampshire Sen. Kelly Ayotte told reporters after coming out of a Republican caucus meeting Sunday afternoon . With the clock running down , 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 Saturday night . `` I want everyone to know I 'm willing to get this done , but I need a dance partner , '' said McConnell , R-Kentucky . McConnell and Biden , who served together in the Senate for more than two decades , were having a `` pretty fruitful '' conversation Sunday afternoon , said Sen. Bob Corker , R-Tennessee . Reid said earlier that McConnell has shown `` absolutely good faith '' in the talks , but `` it 's just that we are apart on some pretty big issues . '' As he headed home Sunday evening , Reid was asked about progress , and he responded : `` Talk to Biden and McConnell . '' Top-level sources on both sides of the negotiations said talks are primarily now in the hands of McConnell and Biden , and they are keeping Reid and House Speaker John Boehner , R-Ohio , informed . If nothing gets done before Monday night at midnight , the expiration of the Bush administration 's 2001 and 2003 tax cuts will increase tax rates , while $ 110 billion in automatic cuts to domestic and military spending -- the result of the 2011 standoff over raising the federal debt ceiling -- will start to kick in . The nonpartisan Congressional Budget Office predicts the combined effect could dampen economic growth by 0.5 % , possibly tipping the U.S. economy back into a recession and driving unemployment back over 9 % . In an interview aired Sunday on NBC 's `` Meet the Press , '' President Barack Obama blamed Republicans for the stalemate that brought lawmakers back to Capitol Hill on a weekend . Obama urged the GOP to drop its opposition to tax increases on top earners and cut a last-minute deal . `` 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 . `` That seems to be their only overriding , unifying theme . '' Obama told NBC that could cost the average middle-class family about $ 2,000 . He said the Senate should go ahead and vote on legislation to make sure middle-class taxes are not raised and that 2 million people do n't lose unemployment benefits . `` If we can get that done , that takes a big bite out of the fiscal cliff , '' he said . `` It avoids the worst outcomes . '' During the interview , Obama said he was willing to consider using chained CPI to adjust Social Security -- 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 . '' But the Democratic source , who did not want to be identified because of the closed nature of the talks , said members understand Obama proposed using chained CPI 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 chained CPI , but many were wiling to go along with it as part of a larger deal , the source said . On taxes , meanwhile , Democrats are arguing that taxes should go up for those making $ 250,000 or more , though some discussions have involved the possibility of raising that figure to a $ 400,000 threshold . Many Republicans have opposed any increase in tax rates . Boehner suffered a political setback by offering a compromise -- a $ 1 million threshold for the higher rates to kick in -- that his GOP House colleagues refused to support . After Obama 's NBC interview , Boehner said the president needs to stand up to his own party and insisted it was the president `` who has never been able to get to 'yes . ' '' `` I am pleased Senators from both parties are currently working to find a bipartisan solution that can finally pass that chamber , '' Boehner said in a statement issued by his office . `` That is the type of leadership America needs , not what they saw from the president this morning . '' 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 , Oklahoma Rep. Tom Cole 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 . Sen. Chuck Schumer , D-New York , told ABC 's `` This Week '' he thought the chances of a short-term , last-minute deal brokered by Senate leaders were better than 50-50 . `` I 've been a legislator for 37 years , and I 've watched how these things work on these big , big agreements , '' Schumer said . `` They almost always happen at the last minute . '' And Sen. Lindsey Graham , R-South Carolina , said the chances are `` exceedingly good '' that some type of deal will be reached by Monday night . `` I think , whatever we accomplish , political victory to the president , hats off to the president . He stood his ground . He 's going to get tax rate increases , maybe not $ 250,000 , but upper-income Americans , '' Graham said on `` Fox News Sunday . '' `` And the sad news for the country is that we have accomplished little in terms of not becoming Greece or getting out of debt . '' Other Republicans argued Sunday that Obama 's plan has n'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 . '' Obama told NBC that he has cut more than $ 1 trillion in spending and offered another $ 1 trillion-plus in additional cuts `` so that we would have $ 2 of spending cuts for every $ 1 of increased revenue . '' He said the majority of Americans have made clear they support his calls for `` a balanced approach '' that would increase taxes on the wealthy . Sen. Dick Durbin , D-Illinois , warned that now is `` exactly the wrong time to go over this cliff . '' `` We are in the midst of an economic recovery . We are seeing new job creation , businesses are seeing new growth , we are seeing the kind of economic indicators we 've been waiting for for years . This going over the cliff is going to bring uncertainty to our markets , and with that uncertainty , a pullback in consumer confidence and a reduction , I 'm afraid , of business activity and the creation of new jobs , '' he said . But former Democratic Party chairman and 2004 presidential contender Howard Dean told ABC that heading over the cliff would not be so bad , calling it a `` fiscal curb '' instead . `` You go back to the Clinton tax rates , and you make some significant cuts . And you cut the Defense Department , which has n't been cut in 30 years , '' said Dean , a former Vermont governor . Meanwhile , going over the cliff gives Obama more leverage , `` because then all of sudden , middle-class people 's taxes are going to rise , and that 's going to be bad for every politician in Washington . '' `` Maybe they 'll actually get something done , '' he said . `` But I think , at this point , at this late hour , I think almost any deal they come up with is worse than going over the cliff . '' Sen. Olympia Snowe , R-Maine , told CNN 's `` State of the Union '' that she expects Congress will vote to extend tax cuts for incomes below $ 250,000 -- perhaps below $ 400,000 -- before midnight Monday . A Senate agreement `` would build momentum '' for the move in the House , she said . `` I think it would be horrific for the country if at this time , the final days of this legislative session that already has reached historic proportions of failure , that we would now culminate in failure to extend these tax cuts , '' said Snowe , who is on her way out of office . CNN 's Jessica Yellin , Dana Bash , Deirdre Walsh , Lisa Desjardins , Ted Barrett and Ashley Killough contributed to this report .
NEW : Reid and Biden are main negotiators now , sources on both sides say . `` There 's still significant distance between the Obama sides , '' McConnell says . Obama calls on GOP to cut a deal on taxes ; Americans argue Obama is overspending .