Political deadlock hits debt crisis talks
The committee attempting to craft a bipartisan solution to America's debt crisis is likely to bow to the inevitable today by declaring failure to reach consensus on how best to restore public finances.
With a deal needing to be ratified by Wednesday, the "Super Committee" of six Democrats and six Republicans has until this morning to break its deadlock. Failure will trigger $1.2 trillion in cuts to public spending. Half will come from the defence budget, which Republicans are anxious to protect; the other half will affect programmes beloved of Democrats.
Neither side has yet been prepared to compromise core values: Republicans are opposed to tax increases; Democrats dislike spending cuts. Meanwhile, the national debt, now $15 trillion, continues to rise by $1.4 trillion a year. With federal taxes at 14 per cent of GDP, their lowest in modern history, polls indicate that three-quarters of Americans favour a compromise that will see the defecit cut through an even mixture of tax increases and cuts.
Their political masters won't play ball, though. John Hensarling, Republican co-chair of the committee, said yesterday the "reality was starting to overtake hope" of a deal.
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