‘Supercommittee’ nearing 11th hour with no deal in sight
A US Congress “supercommittee” on Saturday showed no sign of closing in on a deal to shrink swollen US deficits, unable to close partisan gaps on cutting social programs and raising taxes on the rich.
The 12-member panel faced a rapidly approaching midnight Wednesday deadline to adopt a plan to cut $1.2 trillion from deficits over 10 years, with failure due to trigger draconian cuts to domestic programs and military spending.
A day after the White House said the committee must “do its job,” President Barack Obama trumpeted new trade deals signed during his ongoing trip to Asia as engines of job growth with US unemployment stuck at over nine percent.
“This is important, because over the last decade, we became a country that relied too much on what we bought and consumed. We racked up a lot of debt, but we didn’t create many jobs at all,” he said in Indonesia’s Bali resort island.
But Obama did not directly address the seemingly deadlocked negotiations in Washington, a partisan logjam likely to shape the campaign to the November 2012 elections in which he seeks a second term.
In Washington, Republican Senator and committee member Pat Toomey said in his party’s rejoinder to Obama’s weekly remarks that “it’s not too late for the United States” to avoid a Europe-style fiscal and financial crisis.
“The hour is late. By law, our work on this committee must be completed this coming week. But I remain hopeful that we can meet our goal,” said Toomey.
The committee, created in an August deal on raising the US debt limit, has locked up over Republican refusals of Democratic calls to raise taxes on the very wealthy in return for cuts to cherished social safety net programs.
“This is the divide right now, and we’re still working. I hope we can get there but I don’t know at this point,” Democratic Senator John Kerry, a panel member who sits on the senate’s finance committee, said Friday.
“If you’re going to ask every average American who drives a car, goes to work, struggles each day to pay their bills, and they’re going to somehow be part of the solution, to have something on the table that does not ask the wealthiest people in the country to share in, that would be unconscionable.”
Republicans have rejected tax hikes on the wealthiest Americans on grounds that they would cripple job-creating investment even as the brittle US economy labors under stubbornly high unemployment of more than nine percent.
They have also tried to set the stage for repealing the military spending cuts, which would kick in come January 2013. Defense Secretary Leon Panetta has warned they will leave US forces smaller, slower and weaker than at any time since World War II.
“We are painfully, painfully aware of the deadline that is staring us in the face,” Representative Jeb Hensarling, the co-chair of the panel, told reporters Friday, after a closed-door meeting with fellow committee Republicans.
Hensarling said the committee would meet through the weekend if necessary to “try to find sufficient common ground” on a solution to “simultaneously address both our nation’s jobs crisis and the debt crisis.”
Markets that should have been buoyed by some positive economic data during the week were instead held back by both the supercommittee deadlock and the failure in Europe to quell a debt crisis that threatens to spill overseas.
The Dow Jones Industrial Index finished the week down 2.9 percent from the previous Friday, while the S&P 500 was pared 3.8 percent.
The congressional effort was given a burst of urgency on Wednesday when the US government debt passed the $15 trillion mark, roughly equal to 99 percent of the size of the total US economy, a level economists consider perilous.
Any deal would require majority approval on the committee, which is evenly divided between Democrats and Republicans, after which the full Congress would need to adopt it by December 23 to avoid the automatic cuts.