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US set for battle over tax cut and jobless benefits
Source: Agencies |
November 23, 2011, Wednesday
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THE failure of a special deficit-reduction panel sets up a year-end battle between US President Barack Obama and a dysfunctional Congress over renewing a payroll tax cut and jobless benefits for millions of Americans.
At the same time, the committee's failure means deep, automatic cuts to the Pentagon budget, beginning in 2013, that defense hawks already are dedicated to unwinding.
The panel's failure to reach agreement on how to cut deficits by US$1.2 trillion or more over 10 years marked the end of a yearlong effort by a divided government to grapple with budget deficits that lawmakers of both parties and economists of all persuasions agreed were unsustainable. The result, which was not unexpected, grew out of intractable divisions over spending and taxes that promise to hound lawmakers through 2012 elections.
Stock prices plummeted in the United States and across debt-scarred Europe on Monday as the panel ended its brief, secretive existence without an agreement. Republicans and Democrats alike pointed fingers, maneuvering for political advantage in advance of elections less than a year away.
Lawmakers of both parties agreed action in Congress was still required, somehow and soon.
"Despite our inability to bridge the committee's significant differences, we end this process united in our belief that the nation's fiscal crisis must be addressed and that we cannot leave it for the next generation to solve," the panel's two co-chairs Democratic Senator Patty Murray and Representative Jeb Hensarling, a Republican, said in a somber statement.
Obama, who was criticized by Republicans for keeping the committee at arm's length, said refusal by Republicans to raise taxes on the wealthy was the main stumbling block to a deal.
The president pledged to veto any attempt by lawmakers to repeal a requirement for US$1 trillion in automatic spending cuts that are to be triggered by the so-called supercommittee's failure to reach a compromise, unless Congress approves an alternative approach.
"I will veto any effort to get rid of those automatic spending cuts to domestic and defense spending. There will be no easy off-ramps on this one," Obama said.
The panel's failure left lawmakers confronting a large and controversial agenda for December, including Obama's call to extend an expiring payroll tax cut enacted last year to prop up the economy, as well as jobless benefits averaging about US$300 a week for the long-term jobless.
Neither item is an easy lift, especially given the hard feelings - and presidential politics - consuming Washington.
Democrats had wanted to add those items and more to any compromise, and lawmakers in both parties also face a struggle to stave off a threatened 27 percent cut in payments to doctors who treat patients on Medicare, the government-funded health insurance for the elderly.
At the same time, the committee's failure means deep, automatic cuts to the Pentagon budget, beginning in 2013, that defense hawks already are dedicated to unwinding.
The panel's failure to reach agreement on how to cut deficits by US$1.2 trillion or more over 10 years marked the end of a yearlong effort by a divided government to grapple with budget deficits that lawmakers of both parties and economists of all persuasions agreed were unsustainable. The result, which was not unexpected, grew out of intractable divisions over spending and taxes that promise to hound lawmakers through 2012 elections.
Stock prices plummeted in the United States and across debt-scarred Europe on Monday as the panel ended its brief, secretive existence without an agreement. Republicans and Democrats alike pointed fingers, maneuvering for political advantage in advance of elections less than a year away.
Lawmakers of both parties agreed action in Congress was still required, somehow and soon.
"Despite our inability to bridge the committee's significant differences, we end this process united in our belief that the nation's fiscal crisis must be addressed and that we cannot leave it for the next generation to solve," the panel's two co-chairs Democratic Senator Patty Murray and Representative Jeb Hensarling, a Republican, said in a somber statement.
Obama, who was criticized by Republicans for keeping the committee at arm's length, said refusal by Republicans to raise taxes on the wealthy was the main stumbling block to a deal.
The president pledged to veto any attempt by lawmakers to repeal a requirement for US$1 trillion in automatic spending cuts that are to be triggered by the so-called supercommittee's failure to reach a compromise, unless Congress approves an alternative approach.
"I will veto any effort to get rid of those automatic spending cuts to domestic and defense spending. There will be no easy off-ramps on this one," Obama said.
The panel's failure left lawmakers confronting a large and controversial agenda for December, including Obama's call to extend an expiring payroll tax cut enacted last year to prop up the economy, as well as jobless benefits averaging about US$300 a week for the long-term jobless.
Neither item is an easy lift, especially given the hard feelings - and presidential politics - consuming Washington.
Democrats had wanted to add those items and more to any compromise, and lawmakers in both parties also face a struggle to stave off a threatened 27 percent cut in payments to doctors who treat patients on Medicare, the government-funded health insurance for the elderly.
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