Deficit supercommittee announces failure

The bipartisan deficit supercommittee announced Monday evening that it failed to reach a debt-cutting deal by a congressionally imposed deadline, starting the clock ticking on $1.2 trillion in automatic cuts to defense and domestic programs that will take effect in 2013 unless Congress can halt them.

The panel, which kicked off in September amid a bipartisan rush of hope, met off and on for the next two months but stalemated over the size and composition of tax increases and spending cuts each side would accept as they try to tame the government’s $15 trillion debt.

“After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee’s deadline,” the committee’s co-chairmen, Democratic Sen. Patty Murray and Republican Rep. Jeb Hensarling, said in a statement.

President Obama, speaking from the White House an hour after the committee announced its failure, vowed to veto any bill that turns off the automatic cuts unless lawmakers find at least that much in other tax increases or different spending cuts.

Some lawmakers already are floating ideas for the next step.

Liberal lawmakers said it’s time to focus on more economic stimulus, while conservatives said they will try to turn off the automatic cuts that would bite into military spending.

Meanwhile, many in Congress say the panel’s failure provides a better opportunity for a bigger and better approach to budget savings. A loose coalition of more than 140 lawmakers from both chambers have pushed for $4 trillion in debt reduction - about three times the supercommittee’s minimum target.

“Now is the time for a bipartisan rebellion of members of Congress to come together and pass a comprehensive deficit reduction plan,” said Sen. Joe Lieberman, Connecticut independent. “Let’s put it to a vote on the Senate floor before the end of this year and show that elected officials in Washington are capable of protecting the economic future of the American people.”

Many in the “Go Big” coalition are pressing for Congress to reconsider a $4 trillion deficit-reduction proposal floated last year by a bipartisan White House-commissioned committee headed by former Sen. Alan Simpson, Wyoming Republican, and Erskine Bowles, a chief of staff for President Clinton.

Sen. Joe Manchin III, West Virginia Democrat, wrote Mr. Obama on Monday to urge him to press for a congressional vote on the Simpson-Bowles plan, which he called the “only proposal I have seen that provides pro-growth tax reform and long-term entitlement reform, while cutting our national debt.”

Sen. Mark Kirk, Illinois Republican, also called on his congressional colleagues to take up the Simpson-Bowles plan immediately.

“While neither Democrats nor Republicans fully support the proposal, it reforms the tax code and our entitlement programs in a balanced way, protecting both seniors and a pro-growth economy, while cutting our national debt,” Mr. Kirk said. “Voting on [the plan’s] recommendations will hold Washington accountable.”

For now, though, the supercommittee’s failure will set into motion automatic across-the-board spending cuts divided between defense programs and domestic spending, including a slim portion of Medicare — though benefit payments are not slated to be touched.

Because the automatic cuts wouldn’t take effect until January 2013 in a process called “sequestration,” Congress has plenty of time to change its rules.

Many Republicans have vowed to do just that, saying the Defense Department cannot stomach hundreds of billions of dollars in lower spending.

“During the next year, there will be [EnLeader] opportunities to ameliorate the effect of this across-the-board sequestration,” Sen. Jon Kyl, Arizona Republican and a debt-panel member, said on CNBC Monday. “Certainly, there will be efforts to find offsets or other ways to reduce spending so that those cuts in defense spending don’t occur.”

The president has said he would veto any legislation aimed at undoing sequestration unless Congress comes up with alternative cuts or tax increases.

“There will be no easy offramps on this one,” he said. “We need to keep the pressure up to compromise, not turn off the pressure.”

The supercommittee — a compromise resulting from summer’s hard-fought deal to raise the debt ceiling — officially has until Wednesday night to vote on a plan to lower federal budget deficits by $1.5 trillion over the next 10 years. But, because the bipartisan Congressional Budget Office by law must have an analysis of the proposal ready 48 hours beforehand, the real deadline for a deal was the end of Monday.

Sen. Jeff Sessions of Alabama, the senior Republican on the Senate Budget Committee, partially blamed the secretive nature of the supercommittee and other bipartisan debt-reduction panels, including the so-called “Gang of Six.”

“These secret meetings disengaged the congressional process and prevented the serious national and legislative debate we need from taking place,” Mr. Sessions said. “It also allowed Democrats — who still had no real budget plan — to continue avoiding accountability for the fiscal and economic consequences of their political agenda.”

In remarks at the White House, Mr. Obama, just back from a nine-day trip overseas, made no bones about placing blame squarely on one party.

“Many Democrats in Congress were willing to put politics aside and commit to reasonable adjustments,” the president said. “But despite the broad agreement that exists for such an approach, there are still too many Republicans in Congress who have refused to listen to the voices of reason.”

Mr. Obama has taken heat, though, for not getting involved in the negotiations, and for being away during the final days before the deadline.

On Monday, New York Mayor Michael R. Bloomberg, a political independent, used a news conference to say that the failure rests with the president.

“It’s the chief executive’s job to bring people together and to provide leadership. I don’t see that happening,” Mr. Bloomberg said.

He added, “The executive branch must do more than submit a plan to a committee — and then step aside and hope the committee members take action. That’s not how any CEO would run a business, and at least in modern times, it’s not how landmark pieces of legislation have gotten through Congress.”

With about a month left this year, Mr. Obama called for Congress to act on extending the payroll tax cut to which he and lawmakers last year, saying that middle-class families otherwise would face a $1,000 tax increase.

But the next big step could come in February, when Mr. Obama’s 2013 budget is due and he will have to lay out how the automatic cuts would be absorbed.