No deal at Congress supercommittee on reducing trillion dollar US debt

A US Congress supercommittee has failed to agree on measures to rein in a galloping budget deficit confirming expectations that the goal to cut deficits by 1.2 trillion dollars over 10 years will not be reached. 

Reuters/Kevin Lamarque

Talks between the 12 members of the panel - six Democrats and six Republicans – are said to have faltered over Republican refusals to raise taxes on the rich in return for Democratic pledges to cut cherished social spending programmes.

Republican Senate Minority Leader Mitch McConnell said the deal had foundered over the Democrats “puzzling insistence on taxing job creators in the middle of a jobs crisis”.

President Barack Obama said he was confident lawmakers could reach a new deal and tried to reassure markets by saying there was no immediate threat of the US defaulting on the ballooning national debt.

Under the August law that created the supercommittee, the US impasse triggers draconian automatic cuts to domestic and military spending come January 2013 unless lawmakers repeal that requirement or find an alternative deficit-cutting plan.