Open

Coming up

Don't miss

Replay


LATEST SHOWS

MEDIAWATCH

No strategy and a beige suit

Read more

THE WORLD THIS WEEK

The World This Week - 29 August 2014 (part 2)

Read more

THE WORLD THIS WEEK

The World This Week - 29 August 2014

Read more

ENCORE!

Alain Choquette: A Hilarious Magician in Paris

Read more

FOCUS

France welcomes Iraqi Christian refugees

Read more

FRANCE IN FOCUS

Emmanuel Macron: A new economy minister with a pro-business agenda

Read more

THE OBSERVERS

More of this year's best Observers stories

Read more

#TECH 24

Changing the world, one video game at a time

Read more

IN THE PAPERS

Socialist Party summer conference kicks off in explosive atmosphere

Read more

  • EU leaders choose Tusk and Mogherini for top jobs, discuss Russia sanctions

    Read more

  • Dozens of UN peacekeepers still held by Syrian jihadists

    Read more

  • Opposition protesters clash with Pakistani police outside PM's house

    Read more

  • Austerity row overshadows French Socialist’s annual rally

    Read more

  • Egypt sentences Brotherhood leader Badie to life

    Read more

  • Ceasfire allows Gaza families to relax on the beach

    Read more

  • S. Africa condemns 'military coup' in Lesotho

    Read more

  • Kerry calls for 'coalition of nations' to battle IS militants

    Read more

  • Ukrainian plane with seven on board crashes in Algeria

    Read more

  • Exclusive: Fabius warns Russia of more sanctions

    Read more

  • IMF backs Lagarde amid French corruption probe

    Read more

  • Ebola drug ‘ZMapp’ heals all monkeys in study

    Read more

  • British killer escapes from French psychiatric hospital

    Read more

  • Police hunt for British boy with brain tumour taken to France

    Read more

  • Ukraine to relaunch NATO membership bid

    Read more

  • Suriname leader’s son pleads guilty to courting Hezbollah

    Read more

  • Mapping Ukraine: Canada and Russia in ‘tweet for tat’ row

    Read more

Americas

US 'Supercommittee' fails to find debt solution

Video by Stanislas DE SAINT HIPPOLYTE , Philip CROWTHER

Text by News Wires

Latest update : 2011-11-22

Bipartisan talks aimed at finding a long-term solution to the United States' debt crisis reportedly reached a stalemate on Monday, with lawmakers unable to agree on cuts to welfare spending and raising taxes for the rich.

AP - The bitter partisanship gripping Washington has blocked a deal among members of a special congressional panel that struggled and eventually failed in its assignment to cut more than a trillion dollars from America’s crippling and expanding debt.

As the committee announced Monday that it was going out of business, the U.S. stock market had already taken a sharp decline in anticipation of the so-called supercommittee’s inability to put together legislation that would slash U.S. deficit spending by at least $1.2 trillion. The country’s overall national debt has risen above $15 trillion.

Democratic Sen. Patty Murray and Republican Rep. Jeb Hensarling said that despite “intense deliberations” the members of the panel were unable “to bridge the committee’s significant differences.”

The stalemate could last through next year’s presidential and congressional elections. That could lead to Republicans ousting President Barack Obama and winning control of both chambers of Congress. Or, Democrats could score victories that would force Republicans to yield some ground.

Simply put, Republicans refused to cross their ideological line against increasing taxes. Democrats refused to allow cuts in popular programs that serve the elderly and poor without a compensating growth of government income, especially from the wealthiest Americans.

The real deadline is Wednesday but a solid draft was due Monday night to allow the nonpartisan Congressional Budget Office time to assess project savings had a deal been reached. There had been hope of polished legislation that could go to both houses of Congress for an up or down vote that precluded any amendments or filibusters to alter or delay action. That was to have happened before the end of the year.

The deal between Obama and Congress that set up the Supercommittee included provisions that dictate, in case of failure, $1 trillion in automatic cuts in spending for defense and a range of other government agencies starting in 2013.

Obama said in a news conference after the supercommittee’s announcement that he would veto any attempt to undo the automatic cuts. He blamed Republicans directly for the failure of the supercommittee, attributing it their unwillingness to compromise on taxes.

“There are still too many Republicans in Congress who have refused to listen to the voices of reason and compromise that are coming from outside of Washington,” he said. “They continue to insist on protecting $100 billion worth of tax cuts for the wealthiest 2 percent of Americans at any cost.”

Defense Secretary Leon Panetta as well as lawmakers in both parties have warned that the impact of the automatic cuts on the Pentagon could be devastating.

“In my four decades involved with public service, I have never been more concerned about the ability of Congress to forge common-sense solutions to the nation’s pressing problems,” Panetta, a former House budget committee chairman, said in a statement.

In reality, it is unclear if any of the automatic reductions will ever take effect, since next year’s elections have the potential to alter the political landscape before then.

Americans already hold Congress in record low esteem, 9 percent approval, and the supercommittee failure was certain to send that number even lower. But it also could hurt Obama, who has increased the total U.S. debt considerably - to more that $15 trillion - with emergency spending he said was necessary to keep the American economy out of a depression. He pumped billions into the economy after it nearly collapsed in the final months of George W. Bush presidency.

The stock market fell sharply as investors sought safety in U.S. Treasury bonds and other more certain investments, reacting to fears of a further downgrade of the U.S. credit rating and subsequent jump in interest rates. One agency that rates American government debt, Standard & Poors, marked U.S. bonds down from triple A to AA+ last summer during the congressional fight over raising the U.S. borrowing limit _ normally done as a matter of course. That fight spawned the supercommittee as part of a bitterly fought compromise.

Unwilling to concede failure, several members of the debt panel attended a last-ditch meeting at midday Monday. The gatherings proved futile and the committee’s failure was announced a few hours later.

The White House was prodding Congress to take action until the last and said there was still the possibility of action after the committee disbands.

“Congress could still act and has plenty of time to act. And we call on Congress to fulfill its responsibility,” White House press secretary Jay Carney said.

Failure, which many analysts predicted from the outset, came into plain view as top Democrats and Republicans started publicly blaming one another over the weekend.

Republicans said Democrats’ demands on taxes were simply too great and weren’t accompanied by large enough proposals to curb the explosive growth of so-called entitlement programs like the popular Social Security pension system and health care for the elderly and the poor.

The automatic trigger that would now go into effect in 2013 would force about $1 trillion over nine years in automatic across-the-board spending cuts to a wide range of domestic programs and the Pentagon budget, according to the Congressional Budget Office. That action, called a “sequester,” would also generate $169 billion in savings from lower interest costs on the national debt.
 

Date created : 2011-11-21

  • AVIATION

    Boeing's largest-ever order set to boost US economy

    Read more

  • USA

    Occupy Wall Street protesters clash with police

    Read more

  • USA

    Republican presidential hopefuls tangle on foreign policy, slam Obama

    Read more

COMMENT(S)