U.S. deficit deal still eludes 'supercommittee'
Pessimism grew Wednesday about whether a special U.S. congressional deficit-cutting "supercommittee" will be able to reach a bargain on cutting the national debt with one week to go before its deadline.
The panel was established this summer in a deal between President Barack Obama and Republican House Speaker John Boehner after a bruising fight over budget and debt limits that weighed on financial markets.
The down-to-the-wire deal averted what would have been the first government default in U.S. history.
The terms of the deal require the panel to agree on how to reach a deficit of $1.2 trillion US in the coming fiscal year. Failure would trigger across-the-board spending cuts. The U.S. national debt now totals about $15 trillion.
A Democrat committee member Wednesday questioned whether Republicans on the panel are still willing to deal.
"We need to find out whether our Republican colleagues want to continue to negotiate or whether they've drawn a hard line in the sand," said Chris Van Hollen of Maryland.
The question is whether they've kind of said `take it or leave it.'
"The question is whether they've kind of said 'take it or leave it.' "
The comments came a day after Republican co-chairman Jeb Hensarling told CNBC that the committee was "somewhat stymied for the moment" and that Republicans had "gone as far as we feel we can go."
Hensarling lay blame for the impasse on the committee's Democrat members who are insisting on tax increases of up to $1 trillion in exchange for cost curbs on rapidly spiralling benefit programs such as Medicare and Social Security.
The top Democrat on the deficit committee, Senator Patty Murray, said Wednesday would be a "critical day" for the panel but that Democrats "are not going to accept a plan that gives a tax break to the wealthiest and balance all of this incredible (deficit) challenge on the backs of middle class families."
The deficit for the just-completed budget year was $1.3 trillion, requiring the government to borrow 36 cents for every dollar it spends.
Under current policies, the government could run deficits near the $1 trillion range through the end of the decade.
Even a successful negotiation that produces $1.2 trillion in cuts will still leave a deficit crisis that requires painful choices by policymakers on taxes and benefits programs, budget experts agree.
The Democrats' most recent plan called for $2.3 trillion in deficit cuts, including a $1 trillion tax increase over the coming decade.
Republicans countered with almost $300 billion in new tax revenues as part of a $1.5 trillion debt plan, an offer that even a top Democrat, Majority Whip Dick Durbin of Illinois, called a breakthrough.
With files from The Associated Press