News / USA

    Hopes Fade for US Deficit Reduction Deal

    The U.S. Capitol building in Washington, Nov., 19, 2011.
    The U.S. Capitol building in Washington, Nov., 19, 2011.

    Last-ditch hopes for a bipartisan deal to improve U.S. government finances are waning, days before a deadline for a special congressional committee to recommend ways to achieve $1.2 trillion in deficit reduction over 10 years.  Although the so-called “supercommittee” technically has until Wednesday to act, a firm proposal is needed by late Monday so lawmakers and budget analysts can review the plan.

    With hours remaining until Monday’s interim deadline, no one on the 12-member supercommittee says a deal is imminent. The Republican co-chairman, Congressman Jeb Hensarling of Texas, spoke on the U.S. television program Fox News Sunday.

    "Nobody wants to give up hope. Reality is, to a certain extent, starting to overtake hope. It is a daunting challenge, no doubt about it," he said.

    A Democratic supercommittee member, Representative Xavier Becerra of California, compared the situation to the final minutes of a sporting match.

    "We are deep into the fourth quarter, but there is still time on the clock. I do not think any of us wants to let the time run out," he said.

    Days ago, many lawmakers of both parties urged the supercommittee to bridge ideological gulfs and arrive at a compromise that cuts the deficit by more than the minimum $1.2 trillion specified in a budget deal signed into law earlier this year.  Recent weeks have seen some Republicans soften their opposition to new tax revenue, while many Democrats, including President Barack Obama, have long said they would be willing to restructure costly programs that provide income and health care for retirees.

    But the ratio of spending cuts to tax hikes, and the specific composition of both, present a seemingly insurmountable stumbling block.

    Representative Hensarling says Democrats continue to oppose meaningful spending restraint.

    "We all know, and even the president will admit, that the great drivers of our debt are Medicare, Medicaid and health care. Nothing else comes close. But unfortunately what we have not seen in these talks is any Democrat willing to put a proposal on the table that actually solves the problem," he said.

    Democrats counter that it is Republican insistence on preserving tax cuts for the rich that is the major sticking point. Once again, Congressman Becerra, who also appeared on Fox.

    "Every plan that Democrats have put forward has included cuts to entitlement programs. But it has got to be balanced," he said. "You cannot say you are going to take benefits away from Social Security and Medicare, and not ask our wealthiest Americans [to pay more taxes] - why should they escape participation when we are asking seniors to help cover the costs of deficits?"

    Failure by the supercommittee would trigger automatic spending cuts to domestic programs and national defense. In addition, a wide range of tax cuts enacted since 2001 will expire unless extended by Congress.

    Economist Mark Zandi of Moodys Analytics, a financial ratings firm, says he does not foresee an immediate market panic if the supercommittee fails.

    "I do not think there will be much of a reaction. It is all relative to expectations, and investor expectations with regard to the [super]committee have been and still are very, very low," he said.

    But Zandi adds that a long-term failure by the United States to confront its debt problem would harm the economy and shatter investor confidence.  The U.S. federal deficit exceeds $1 trillion, contributing to a national debt of about $15 trillion.

    You May Like

    New EU Asylum Rules Could Boost Rightists

    New regulations will seek to correct EU failures in dealing with migrant crisis, most notably inability to get member states to absorb a total of 160,000 refugees

    More Political Turmoil Likely in Iraq as Iran Waits in the Wings

    Analysts warn that Tehran, even though it may not be engineering the Sadrist protests in Baghdad, is seeking to leverage its influence on its neighbor

    Forced Anal Testing Case to Appear Before Kenya Court

    Men challenge use of anal examinations to ‘prove homosexuality’; practice accomplishes nothing except to humiliate those subjected to them, according to Human Rights Watch

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Tensions Rising Ahead of South China Sea Rulingi
    X
    May 03, 2016 5:16 PM
    As the Philippines awaits an international arbitration ruling on a challenge to China's claims to nearly all of the South China Sea, it is already becoming clear that regardless of which way the decision goes, the dispute is intensifying. VOA’s Bill Ide has more from Beijing.
    Video

    Video Tensions Rising Ahead of South China Sea Ruling

    As the Philippines awaits an international arbitration ruling on a challenge to China's claims to nearly all of the South China Sea, it is already becoming clear that regardless of which way the decision goes, the dispute is intensifying. VOA’s Bill Ide has more from Beijing.
    Video

    Video Painting Captures President Lincoln Assassination Aftermath

    A newly restored painting captures the moments following President Abraham Lincoln’s assassination in 1865. It was recently unveiled at Ford’s Theatre in Washington, where America’s 16th president was shot. It is the only known painting by an eyewitness that captures the horror of that fateful night. VOA’s Julie Taboh tells us more about the painting and what it took to restore it to its original condition.
    Video

    Video Elephant Summit Results in $5M in Pledges, Presidential Support

    Attended and supported by three African presidents, a three-day anti-poaching summit has concluded in Kenya, resulting in $5 million in pledges and a united message to the world that elephants are worth more alive than dead. The summit culminated at the Nairobi National Park with the largest ivory burn in history. VOA’s Jill Craig attended the summit and has this report about the outcomes.
    Video

    Video Displaced By War, Syrian Artist Finds Inspiration Abroad

    Saudi-born Syrian painter Mohammad Zaza is among the millions who fled their home for an uncertain future after Syria's civil war broke out. Since fleeing Syria, Zaza has lived in Lebanon, Egypt, Jordan and now Turkey where his latest exhibition, “Earth is Blue like an Orange,” opened in Istanbul. He spoke with VOA about how being displaced by the Syrian civil war has affected the country's artists.
    Video

    Video Ethiopia’s Drought Takes Toll on Children

    Ethiopia is dealing with its worst drought in decades, thanks to El Nino weather patterns. An estimated 10 million people urgently need food aid. Six million of them are children, whose development may be compromised without sufficient help, Marthe van der Wolf reports for VOA from the Metahara district.
    Video

    Video Little Havana - a Slice of Cuban Culture in Florida

    Hispanic culture permeates everything in Miami’s Little Havana area: elderly men playing dominoes as they discuss politics, cigar rollers deep at work, or Cuban exiles talking with presidential candidates at a Cuban coffee window. With the recent rapprochement between Cuba and United States, one can only expect stronger ties between South Florida and Cuba.
    Video

    Video California Republicans Weigh Presidential Choices Amid Protests

    Republican presidential candidates have been wooing local party leaders in California, a state that could be decisive in selecting the party's nominee for U.S. president. VOA's Mike O’Sullivan reports delegates to the California party convention have been evaluating choices, while front-runner Donald Trump drew hundreds of raucous protesters Friday.
    Video

    Video Kurdish Football Team Helps War-Torn City Cope

    With the conflict still raging across much of Turkey’s predominantly Kurdish southeast, between the rebel PKK and the Turkish state, many Kurds are trying to escape the turmoil by focusing on the success of their football team Amedspor in Diyarbakir. The club is increasingly becoming a symbol for Kurds, not only in Diyarbakir but beyond. Dorian Jones reports from southeast Turkey.
    Video

    Video ‘The Lights of Africa’ - Through the Eyes of 54 Artists

    An exhibition bringing together the work of 54 African artists, one from each country, is touring the continent after debuting at COP21 in Paris. Called "Lumières d'Afrique," the show centers on access to electricity and, more figuratively, ideas that enlighten. Emilie Iob reports from Abidjan, the exhibition's first stop.
    Video

    Video Florida’s Weeki Wachee ‘Mermaids’ Make a Splash

    Since 1947, ‘mermaids’ have fascinated tourists at central Florida’s Weeki Wachee Springs State Park with their fluid movements and synchronized ballet. Performing underwater has its challenges, including cold temperatures and a steady current, as VOA’s Lin Yang and Joseph Mok report.
    Video

    Video Somali, African Union Forces Face Resurgent Al-Shabab

    The Islamic State terror group claimed its first attack in Somalia earlier this week, though the claim has not been verified by forces on the ground. Meanwhile, al-Shabab militants have stepped up their attacks as Somalia prepares for elections later this year. Henry Ridgwell reports there are growing frustrations among Somalia’s Western backers over the country’s slow progress in forming its own armed forces to establish security after 25 years of chaos.
    Video

    Video Nigerians Feel Bite of Buhari Economic Policy

    Despite the global drop in the price of oil, Nigerian President Muhammadu Buhari has refused to allow the country's currency to devalue, leading to a shortage of foreign exchange. Chris Stein reports from Lagos businessmen and consumers are feeling the impact as the country deals with a severe fuel shortage.

    Special Report

    Adrift The Invisible African Diaspora