November 22, 2011
LAWMAKERS on a US congressional deficit reduction committee assembled yesterday in a Senate office room for more than two hours in an effort to reach a last-minute deal as their colleagues and the markets braced for news of failure.
"Both sides are feeling angst and greater angst at the possibility of no agreement, so they're working harder; more creatively to see what can be accomplished," said Senator Max Baucus as a meeting wrapped up. "That's happening on both sides."
Leaders of the "supercommittee" are expected to make an announcement ending their talks this morning if a deal isn't reached, according to an aide with knowledge of the discussions. But lawmakers said they planned to hold more meetings. As a backup plan, space was reserved in a section of the Senate for an announcement this morning.
"We're continuing to meet and there are nuances of old ideas and also new ideas," Mr Baucus said.
But Republican Chris Van Hollen was more neutral, saying lawmakers were "just having last-minute discussions". And an aide with knowledge of the discussions sought to dial down reason for hope.
"Though talks continue, there is no sense of progress," the aide said. "The Republicans are simply not budging and this appears to be going nowhere."
Senator John Kerry was also at the meeting, along with Senators Jon Kyl, Patty Murray, Rob Portman and Republican Fred Upton. Republican lawmakers left the meeting just after lunch, but Democrats remained in the room for almost another hour.
The supercommittee was created in August as a way to tie an increase in the US borrowing limit to measures to rein in the budget deficit. Its mandate is to come up with at least $US1.2 trillion of deficit reductions over 10 years. If the panel fails, automatic government spending cuts would take hold in 2013.
With just hours left before their effective deadline, the committee has a slim chance of reaching a last-ditch agreement. Expectations for the panel's success dropped last week after senior party leaders failed to agree on a smaller package as a back-up in case the supercommittee discussions failed to culminate in a deal.
"If these guys can't come up with $US1.2 trillion, it just goes to show why doing things like supercommittees was a bad idea to begin with," said Republican Tom Rooney in a telephone interview. He said any failure will force members on the House Armed Services Committee to scramble to deal with mandatory defence-spending cuts, since the law requires the reductions be split evenly between defence and non-defence spending.
Markets were downbeat on Wall Street. The Dow Jones Industrial Average was 261 points, or 2.2 per cent, more than 2 per cent in recent trading. The index is now slightly down for 2011, moving into negative territory for the year for the first time since mid-October. The Standard & Poor's 500-stock index was also lower.
Under the deal reached to raise the debt ceiling this summer, the bipartisan, 12-lawmaker technically has until tomorrow to figure out how to reduce the deficit by at least $US1.2 trillion over 10 years. But since the supercommittee members must have 48 hours to consider any proposal before tomorrow’s vote, this is effectively their last day to reach an accord.
Absent a last-ditch agreement, the co-chairmen of the supercommittee, Ms Murray and Republican Jeb Hensarling, will likely make a statement ending the group's effort, according to an aide with knowledge of the discussions.
Article by Kristina Peterson and Siobhan Hughes from Dow Jones Newswires