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

Beijing Warns Hong Kong Protesters, Cracks Down at Home

In suppressing protest news, China reportedly has arrested more than 20 people on the mainland who acted in support of Hong Kong pro-democracy protesters More

Competing Goals Could Frustrate Efforts to Fight Islamic State

As alliances shift and countries re-define themselves, analysts say long-standing goals of some key players in Middle East may soon compete with Western goals More

Child Sexual Exploitation to Worsen in SE Asia

Southeast Asia’s planned economic integration is a key step for boosting the region’s productivity, but carries downsides as well More

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.
The Legacy of Jimmy Carter: The Preacher from Plainsi
X
October 01, 2014 10:45 AM
It is common in the United States to see tourists flock to sites associated with America's presidents. Some are privately owned and others are run by the National Park Service or the National Archives -- but most have helped draw business and people into the towns and cities where they are located. As VOA’s Kane Farabaugh reports, there is one particular presidential hometown that is unique in what it has to offer those who make the trip.
Video

Video The Legacy of Jimmy Carter: The Preacher from Plains

It is common in the United States to see tourists flock to sites associated with America's presidents. Some are privately owned and others are run by the National Park Service or the National Archives -- but most have helped draw business and people into the towns and cities where they are located. As VOA’s Kane Farabaugh reports, there is one particular presidential hometown that is unique in what it has to offer those who make the trip.
Video

Video Hong Kong Protests Draw New Supporters on National Holiday

On the 65th anniversary of the founding of Communist China, Hong Kong protesters are hoping to stage the largest pro-democracy demonstration since the 1989 Tiananmen protests. VOA's Brian Padden visited one of the protest sites mid-day, when the atmosphere was calm and where the supporters were enthusiastic about joining what they are calling the umbrella revolution.
Video

Video India's PM Continues First US Visit

India's prime minister is on his first visit to Washington, to strengthen political and economic ties between the world's oldest and the world biggest democracies. He came to the U.S. capital from New York, the first stop on his five-day visit to the country that denied him an entry visa in the past. From Washington, Zlatica Hoke reports Modi seemed most focused on attracting foreign investment and trade to increase job opportunities for his people.
Video

Video Malaysia Struggles to Stop People Joining Jihad

Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Could US Have Done More to Stop Rise of Islamic State?

President Obama says airstrikes against Islamic State militants in Syria will likely continue for some time because, in his words, "there is a cancer that has grown for too long." So what if President Obama had acted sooner in Syria to arm more-moderate opponents of both the Islamic State and the Syrian government? VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid