Quantcast

No deal in sight on deficit plan as time runs out

By David Espo

Associated Press

Published: Monday, Nov. 21 2011 1:56 p.m. MST

Supercommittee Co-Chair Sen. Patty Murray, D-Wash., right, talks with Supercommittee member, Senate Finance Committee Chairman Sen. Max Baucus, D-Mont. in the Eisenhower Executive Office Building on the White House complex, Monday, Nov. 21, 2011, where President Barack Obama signed legislation that will provide tax credits to help put veterans back to work.

Carolyn Kaster, Associated Press

WASHINGTON — Congress' supercommittee stood at the brink of ignominious failure on Monday, impotent in the face of enduring political divisions over taxes and spending and powerless to rein in government debt that stands at a staggering $15 trillion and growing.

Stock prices plummeted at home and across debt-scarred Europe as the panel neared the end of a brief, secretive existence, and Republicans and Democrats maneuvered for political advantage in advance of 2012 elections less than a year away.

Under the law that established the committee last summer, failure by the six Republicans and six Democrats to reach a compromise would trigger about $1 trillion in automatic spending cuts in military and domestic government programs beginning in 2013. In reality, though, it is unclear if any of those reductions will ever take effect, since next year's presidential and congressional elections have the potential to alter the political landscape before cuts would take effect.

Several committee members met in the Capitol at mid-day, but there was no indication of progress toward an 11th-hour compromise. The panel faced an end-of-day deadline to produce an accord to cut $1.2 trillion from federal deficits across the next decade, and aides in both parties said they expected a written statement from the committee's co-chairs, Sen. Patty Murray, D-Wash., and Rep. Jeb Hensarling, R-Texas., to mark the end of talks.

At the White House, President Barack Obama's press secretary still called for compromise.

"Instead of pointing fingers and playing the blame game, Congress should act," said Jay Carney. He said the automatic cuts that would fall on the Pentagon are "deeper than we think is wise," but he added the administration does not think Congress should undo them. Obama signed the legislation earlier in the year that mandates the cuts as a stopgap in case the committee failed to agree.

Some Republicans said Obama shared the blame for any failure. "It's amazing to what lengths he will go to avoid making tough decisions," said Texas Gov. Rick Perry, a GOP White House hopeful.

Based on accounts provided by officials familiar with the talks, it appeared that weeks of private negotiations did nothing to alter a fundamental divide between the two political parties. Before and during the talks, Democrats said they would agree to significant savings from benefit programs like Medicare, Medicaid and Social Security only if Republicans would agree to a hefty dose of higher taxes, including cancellation of Bush-era cuts at upper-income brackets. In contrast, The GOP side said spending, not revenue, was the cause of the government's chronic budget deficits, and insisted that the tax cuts approved in the previous decade all be made permanent.

The Democrats' "idea was this was the opportunity to raise taxes,'" said Sen. Jon Kyl of Arizona, the Senate's second-ranking Republican and a member of the supercommittee. "It didn't matter what we proposed; the price of that was going to be $1.3 trillion in new taxes," he added in a CNBC interview, although Democrats made at least two offers that called for smaller amounts of additional tax revenue.

Sen. John Kerry, D-Mass., said on MSNBC, "I have demonstrations outside my office. I've had rallies. I've had unbelievable amount of pushback because we were ready and prepared to put on the table some of those so-called sacred cows." Republicans, he said, refused to consider cancellation of the tax cuts for the wealthy.

The talks also were hampered by internal divisions within both parties.

Get The Deseret News Everywhere

Subscribe

Mobile

RSS