US Congress deadlocked over $1.2tn cuts package

TALKS aimed at reducing the United States’ soaring national debt appeared set to end in failure yesterday, prompting a slide in financial markets and bitter political finger-pointing.

With hours ticking down until a self-imposed deadline, a Congressional supercommittee tasked with cutting America’s deficit by $1.2 trillion (£770 billion) remained deadlocked, with the extension of Bush-era tax relief for the rich remaining a major sticking point.

Democrat and Republican members of the committee were keen to pin responsibility on the other side.

The bipartisan panel officially has until tomorrow to agree a package of cuts and revenue increases, but under its own rules, any plan needs to be unveiled 48 hours in advance.

Democrats pointed at Republican insistence on the continuation of cuts for wealthy Americans passed under the Bush administration and due to expire at the end of this year.

Some members of Congress appear hamstrung over the issue, having already signed influential lobbyist Grover Norquist’s pledge not to raise taxes.

The committee’s co-chair, Democrat senator Patty Murray, told CNN: “There is one sticking divide, and that’s the issue of shared sacrifice.

“The wealthiest Americans who earn over a million a year have to share too. And that line in the sand, we haven’t seen Republicans willing to cross yet.”

Fellow Democrat panel member Senator John Kerry put the blame firmly at the door of Republican panel members, telling NBC’s Meet the Press: “If they will give up their insistence on the Bush tax cuts, we can get this thing done.”

But Republicans countered that Democrats were making demands that were too great while offering too little in the way of spending cuts.

Republican co-chair of the panel, Representative Jeb Hensarling, told Fox News: “Unfortunately, what we haven’t seen is any Democrat willing to put a proposal on the table that actually solves the problems.”

Congressional approval ratings are at an all-time low, with voters seemingly turned off by its inability to get things done.

The supercommittee was tasked by the White House with reaching a compromise to shave more than a trillion dollars off a national debt that totals $15tn (£9.6tn).

Its apparent failure will trigger automatic spending cuts across the board totalling $1.2tn.

The reductions – over a ten-year period from 2013 – will see the Pentagon budget slashed by $454bn (£290bn). Defence secretary Leon Panetta has warned that would be “devastating”, leaving a “hollow force”.