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Special committee expects failure in bid to reduce U.S. deficit

WASHINGTON — With the hours ticking away toward a self-imposed deadline, congressional leaders conceded Sunday that talks on a sweeping deficit agreement were near failure and braced for recriminations over their inability to reach a deal.

The stalemate was the latest sign of partisan deadlock in Washington, which members of both parties do not expect to lift until the 2012 election clarifies which party has the upper hand.

Barring an unexpected turnaround before today's deadline, the failure of the special congressional deficit committee will be the third high-profile effort to fall short of a deal in the last 12 months, including a bipartisan deficit commission and talks during the summer between President Barack Obama and House Speaker John Boehner, R-Ohio.

By law, the special congressional committee's inability to reach an agreement will trigger $1.2 trillion in automatic spending cuts over 10 years to the military and domestic programs, starting in 2013.

As time wound down to tonight's deadline for an agreement, Capitol Hill lacked the frenzied negotiation typical of a congressional race to beat the clock. Instead, many members — well aware that congressional approval ratings are near historic lows in polls — seemed resigned to the fact that Democrats and Republicans remained far apart on major budget issues, especially tax increases on the affluent, which Democrats insist must be part of any deficit solution and that Republicans oppose.

The White House called on the 12 members of the special committee to finish their work, but lawmakers on the panel, which is evenly divided between the two parties, instead blamed each other for its failure.

Many outside Washington, including on Wall Street, had low expectations for the committee, and some analysts predicted that the breakdown might not have a major effect on financial markets. But the developments added to the air of uncertainty — with some members of Congress vowing to repeal the automatic cuts with new legislation — at a time when the world economy is coping with Europe's debt problems and a sluggish recovery from the 2008 financial crisis.

Once they return from their Thanksgiving recess, members of Congress face another set of decisions with the potential to hamstring the economy. A temporary payroll-tax cut for nearly all households and jobless benefits for many long-term unemployed are set to expire at year's end, and many economists predict that growth and hiring will slow if such measures are not renewed.

On Sunday, in the halls of the Capitol and on television talk shows, Democrats and Republicans offered strikingly different post-mortems for the process.

Democrats blamed the Republicans for their unwillingness to yield on a no-new-taxes pact they signed at the request of a conservative antitax group, arguing that the U.S. public realizes that no grand deal could be reached without a combination of spending cuts and new tax revenue.

"As long as we have some Republican lawmakers who feel more enthralled with a pledge they took to a Republican lobbyist than they do to a pledge to the country to solve the problems, this is going to be hard to do," Sen. Patty Murray, D-Wash., the committee's co-chairwoman, said on CNN's State of the Union.

But Rep. Jeb Hensarling, R-Texas, the other co-chairman, said it was inflexibility on the part of the Democrats that had caused the impasse, particularly when it came to agreeing to major money-saving changes in social programs like Medicare and Social Security.

"Unfortunately, what we haven't seen in these talks from the other side is any Democrats willing to put a proposal on the table that actually solves the problems," Hensarling said on Fox News Sunday.

At the White House, officials made a final effort to spur the committee on to a conclusion. "Avoiding accountability and kicking the can down the road is how Washington got into this deficit problem in the first place," White House spokeswoman Amy Brundage said in a statement. "So Congress needs to do its job here and make the kind of tough choices to live within its means that American families make every day."

The apparent failure of the panel already became a topic in the 2012 presidential campaign. Mitt Romney, speaking in New Hampshire on Sunday, blamed Obama for the failure, saying that he should have been more involved in pushing for a deal.

"He hasn't had any role. He's done nothing," Romney said. "This is another example of failed leadership."

A deal effectively needs to be reached by tonight, if the deficit committee is going to approve it by Wednesday, the legal deadline for an agreement before the automated cuts are supposed to be imposed. Any final plan must be made public 48 hours before the legal deadline and be evaluated by the nonpartisan Congressional Budget Office. If no plan is approved, automated cuts would not start until January 2013.

Republicans have already begun plans to reconfigure the automatic cuts because about half would come from the Pentagon; Democrats and Obama are likely to resist those efforts since some domestic spending programs are exempted from the cuts.

As of Sunday evening, aides on Capitol Hill said that no meeting among all 12 members of the Joint Select Committee on Deficit Reduction had been set for today.

Both sides agreed that a deal remained a possibility, although it was considered unlikely.

"Nobody wants to give up hope," Hensarling said, before adding, "Reality, to some extent, is starting to overtake hope."

Special committee expects failure in bid to reduce U.S. deficit 11/20/11 [Last modified: Sunday, November 20, 2011 11:04pm]
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