Supercommittee fails to slash debt
The bitter partisanship gripping Washington has blocked a deal among members of a special congressional panel that struggled and eventually failed in its mission to cut more than a trillion dollars from America's crippling and expanding debt.
As the committee announced that it was going out of business, the US stock market had already taken a sharp decline in anticipation of the so-called supercommittee's inability to put together legislation that would slash US deficit spending by at least 1.2 trillion dollars (£769 billion). The country's overall national debt has risen above 15 trillion dollars (£9.6 trillion).
The stalemate could last beyond next year's presidential and congressional elections. That could lead to Republicans ousting President Barack Obama and winning control of both chambers of Congress - or Democrats could score victories that would force Republicans to yield some ground.
Simply put, Republicans refused to cross their ideological line against increasing taxes. Democrats refused to allow cuts in popular programmes that serve the elderly and poor without a compensating growth of government income, especially from the wealthiest Americans.
The real deadline is Wednesday, but a solid draft was due on Monday night to allow the non-partisan Congressional Budget Office time to assess project savings had a deal been reached. There had been hope of polished legislation that could go to both houses of Congress for an up or down vote that precluded any amendments or filibusters to alter or delay action. That was to have happened before the end of the year.
The deal between Mr Obama and Congress that set up the supercommittee included provisions that dictate, in case of failure, one trillion dollars in automatic cuts in spending for defence and a range of other government agencies starting in 2013.
Mr Obama said after the supercommittee's announcement that he would veto any attempt to undo the automatic cuts and blamed Republicans directly for the failure of the supercommittee, attributing it their unwillingness to compromise on taxes. "There are still too many Republicans in Congress who have refused to listen to the voices of reason and compromise that are coming from outside of Washington," he said. "They continue to insist on protecting 100 billion worth of tax cuts for the wealthiest 2% of Americans at any cost."
Defence secretary Leon Panetta as well as politicians in both parties have warned that the impact of the automatic cuts on the Pentagon could be devastating. "In my four decades involved with public service, I have never been more concerned about the ability of Congress to forge common-sense solutions to the nation's pressing problems," Mr Panetta, a former House of Representatives budget committee chairman, said.
In reality, it is unclear if any of the automatic reductions will ever take effect, since next year's elections have the potential to alter the political landscape before then.