NYT: Lawmakers trade blame as deficit talks crumble

WASHINGTON?? With the hours ticking away toward a self-imposed deadline, Congressional leaders conceded Sunday that talks on a sweeping deficit agreement were near failure and braced for recriminations over their inability to reach a deal.

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The stalemate was the latest sign of partisan deadlock in Washington, which members of both parties do not expect to lift until the 2012 election has clarified which party has the upper hand.

Barring an unexpected turnaround before Monday?s deadline, the failure of the special Congressional deficit committee will be the third high-profile effort to fall short of a deal in the last 12 months, including a bipartisan deficit commission and talks last summer between President Obama and Speaker John A. Boehner.

Story: Deficit supercommittee on the brink of failure

By law, the special Congressional committee?s inability to reach an agreement will trigger $1.2 trillion in automatic spending cuts over 10 years to the military and domestic programs, to start in 2013.

As time wound down to a Monday night deadline for an agreement, Capitol Hill lacked the frenzied negotiation typical of a Congressional race to beat the clock.? Instead, many members ? well aware that Congressional approval ratings are near historic lows in polls ? seemed resigned to the fact that Democrats and Republicans remained far apart on major budget issues, especially tax increases on the affluent, which Democrats insist must be part of any deficit solution and that Republicans oppose.

Video: Super fail for supercommittee? (on this page)

The White House called on the 12 members of the special committee to finish their work, but lawmakers on the panel, which is evenly divided between the two parties, instead blamed each other for its failure.

Many outside Washington, including on Wall Street, had low expectations for the committee, and some analysts predicted that the breakdown might not have a major effect on financial markets. But the developments added to the air of uncertainty at a time when the world economy is coping with Europe?s debt problems and a sluggish recovery from the 2008 financial crisis. Some members of Congress were vowing to repeal the automatic cuts, locked in by the law that raised the debt ceiling in August, with new legislation.

Once they return from their Thanksgiving recess, members of Congress face another set of decisions with the potential to hamstring the economy. A temporary payroll-tax cut for nearly all households and jobless benefits for many long-term unemployed are scheduled to expire at year?s end, and many economists predict that growth and hiring will slow further if such measures are not renewed.

On Sunday, in the halls of the Capitol and on television talk shows, Democrats and Republicans offered strikingly different post-mortems for the process.

Democrats blamed the Republicans for their unwillingness to yield on a no-new-taxes pact they signed at the request of a conservative antitax group, arguing that the American public realizes that no grand deal could be reached without a combination of spending cuts and new tax revenue.

?As long as we have some Republican lawmakers who feel more enthralled with a pledge they took to a Republican lobbyist than they do to a pledge to the country to solve the problems, this is going to be hard to do,? Senator Patty Murray, Democrat of Washington, the committee?s co-chairwoman said on CNN?s ?State of the Union.?

But Representative Jeb Hensarling, Republican of Texas, the other co-chairman, said it was inflexibility on the part of the Democrats that had caused the impasse, particularly when it came to agreeing to major money-saving changes in social programs like Medicare and Social Security.

Video: Kyl: One way or another, cuts will happen (on this page)

?Unfortunately, what we haven?t seen in these talks from the other side is any Democrats willing to put a proposal on the table that actually solves the problems,? Mr. Hensarling said on ?Fox News Sunday.?

At the White House, officials made a final effort to spur the committee on to a conclusion. ?Avoiding accountability and kicking the can down the road is how Washington got into this deficit problem in the first place,? a White House spokeswoman, Amy Brundage, said in a statement. ?So Congress needs to do its job here and make the kind of tough choices to live within its means that American families make every day.?

The apparent failure of the panel already became a topic in the 2012 presidential campaign. Mitt Romney, speaking in New Hampshire on Sunday, blamed President Obama for the failure, saying that he should have been more involved in pushing for a deal.

?He hasn?t had any role. He?s done nothing,? Mr. Romney said. ?This is another example of failed leadership.?

But another committee member, Senator John Kerry, Democrat of Massachusetts, said on ?Meet the Press,? that President Obama and White House budget officials ?were asked to be hands off.?

Video: Kerry: We?re a deficit cutting committee, not a tax cutting one (on this page)

?The Republicans said, ?Don?t let Obama come into this, because if he does, it will make it political,? ? Mr. Kerry said, adding, ?They?ve been intimately involved, but carefully so that they didn?t politicize it. I think they did the right thing.

A deal effectively needs to be reached by Monday night, if the committee is going to approve it by Wednesday, the legal deadline for an agreement before the automated cuts are supposed to be imposed. Automated cuts would not start until January 2013.

Republicans have already begun plans to reconfigure the automatic cuts because about half would come from the Pentagon; Democrats and President Obama are likely to resist those efforts since some domestic spending programs are exempted from the cuts. As of Sunday evening, aides on Capitol Hill said no meeting among all 12 members of the Joint Select Committee on Deficit Reduction has been set for Monday.

The aides also said that as far as they knew, no significant process had been made over the weekend, although it was possible that there have been private conversations between a few individual members of the committee that could represent an offer of compromise.

?But at this point it looks unlikely that that offer will come,? one aide to a Democratic member on the committee said, asking that he not be named, as he was not authorized to discuss the negotiations publicly.

The focus instead now is mostly on placing blame.

Video: Kerry: ?Republican unwillingness? the only thing stopping a deal (on this page)

"Members went into this more than hopeful," Representative Chris Van Hollen, a Democrat from Maryland who sat on the panel, said in an interview Sunday. "The question from Day 1 was whether or not Republicans would be serious about a balanced plan. That was always the question, and the answer at least appears to be no."

Republicans late last week sent Democrats a proposal to save $643 billion over a decade?about half the goal. But the proposal was quickly rejected as unacceptable, as the Democrats said it included only a small amount of new revenue.

Stock and bond market experts on Sunday said Wall Street markets likely would not react in a major way on Monday, as the so-called sequesters ? budget terminology for automatic spending cuts ? still provide an insurance policy that the annual deficit could be curtailed.

?I don?t think the markets had a lot of expectation that they would reach a deal,? said Ajay Rajadhyaksha, a managing director at Barclays Capital. ?What matters far more is what happens in Europe over the next week or two.?

Among legislators on Sunday, there was even disagreement about what the primary stumbling block had been to reaching an accord.

The Democrats said that the refusal of the Republicans on the bipartisan committee to agree to allow tax cuts first passed during the Bush administration to expire at the end of 2012? which would be one way to raise new revenue, to match spending cuts the Democrats have agreed to accept ? was to blame.

?If they will give up their insistence on the Bush tax cuts, we can get this done,? Mr. Kerry said on ?Meet the Press.?

But Republicans countered that with the economy already weak, Congress would do more harm if it agreed to a deal that would significantly increase federal revenue, implying that the package that the Democrats had pushed called for at least $1 trillion in new taxes.

?You can?t grow if you raise taxes in the middle of a recession,? Senator Jon Kyl, Republican of Arizona, a committee member and the second-ranking Republican in the Senate, said, also on ?Meet the Press.?

With failure looming, the focus was increasingly turning to how to perhaps change the mix of automated budget cuts before they take effect in January 2013.

The Congressional Budget Office has estimated that domestic programs ? including education, transportation and immigration ? would be cut by 7.8 percent in 2013 and that Medicare spending would fall by about 2 percent. The biggest cut would be to defense programs, which would be reduced by about 10 percent.

But several large programs would be exempt from automatic cuts, including Social Security, Medicaid, veterans? benefits and various antipoverty programs, based on the agreement Congress and the White House reached in the summer. This is part of the reason why certain Democrats in recent weeks have become less willing to compromise ? the automated cuts, they concluded, may be better than anything they could negotiate.

Jackie Calmes and Jennifer Steinhauer contributed reporting.

This article, "Lawmakers trade blame Congressional budget talks crumble," first appeared in The New York Times.

Copyright ? 2011 The New York Times

Source: http://www.msnbc.msn.com/id/45381699/ns/politics-the_new_york_times/

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