Supercommittee Fails To Reach Budget Deal
The failure of a special deficit-reduction supercommittee sets up a year-end battle between President Barack Obama and a dysfunctional Congress over renewing a payroll tax cut and jobless benefits for millions.
The failure of the debt panel also means deep, automatic cuts to the Pentagon budget, beginning in 2013, that defense hawks already are vowing to unwind.
Stock prices plummeted Monday as the panel ended its brief, secretive existence without an agreement on how to cut $1.2 trillion or more from the deficit over 10 years. The supercommittee’s failure was not unexpected and grew out of intractable divisions over spending and taxes that promise to hound lawmakers through 2012 elections that could sort it all out.
Republicans and Democrats alike pointed fingers, maneuvering for political advantage.
Bush tax cut debate dooms deal to cut deficit
A long-running war between Democrats and Republicans over Bush-era tax cuts doomed the chances of the deficit-reduction supercommittee reaching a deal.
Efforts to overhaul the tax code may await the same fate as both parties gear up to make taxes a central issue in 2012 elections.
Republicans insisted during the supercommittee negotiations that curbing tax breaks to raise revenues be coupled with guarantees that tax cuts enacted under President George W. Bush be made permanent. Democrats balked, fueling a debate that is unlikely to be settled before voting next November.
Republicans want to make all the Bush tax cuts permanent. Most Democrats want to extend them only for individuals making less than $200,000 a year and married couples making less than $250,000.
In NH, Obama to push for payroll tax cut extension
President Barack Obama is targeting Republicans in Congress and on the presidential campaign trail in his push for extending payroll tax cuts that are due to expire at the end of the year.
The president is visiting a high school in Manchester, N.H., on Tuesday as GOP presidential candidates blanket the state with an anti-Obama message ahead of the state’s Jan. 10 presidential primary.
The White House says if the payroll tax cuts are not renewed, the average family will pay an additional $1,000 in taxes.
Republicans have said the extension of the payroll tax cut is one part of the president’s $447 billion jobs plan where both sides may find common ground.
(Copyright 2011 by The Associated Press. All Rights Reserved.)