WASHINGTON – After months of talks, the high-profile congressional effort to rein in the ballooning US debt was expected to end in failure yesterday with negotiators announcing they could not bridge deep divides over taxes and spending cuts to reach a deal.
The Republican and Democratic leaders of a 12-member congressional “super committee” were set to declare defeat in a joint statement yesterday. They failed to find enough common ground on a package of at least $1.2 trillion (€889 billion) in deficit reduction over 10 years.
As the clock ticked down to a deadline to publish the results of any deal, a small group of panel members gathered for a last-ditch effort to compromise. But several congressional aides who have worked closely with the panel said they had little hope of progress.
The super-committee members agreed. “I wouldn’t be optimistic. I don’t want to create any false hope here,” Republican senator Jon Kyl told Fox News.
Failure to reach a deal on deficit reduction would trigger $1.2 trillion in cuts over the next decade, beginning in 2013.
The deadlock focuses on Republican opposition to tax increases, particularly on the wealthiest Americans, and Democratic refusal to cut into federal retirement and healthcare benefits without such tax increases.
After a year of bruising budget battles, super-committee failure would be another sign that US lawmakers are too entrenched in their positions to compromise on the tax increases and benefit cuts that budget experts say are needed to set the country’s finances on a stable path.
It would also cement notions of a dysfunctional Washington among voters and investors already disenchanted with the brinkmanship that brought the US to the edge of a first-ever debt default and subsequent credit downgrade in August. – (Reuters)