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Massive spending cuts likely after US 'super-committee' collapses without deal

The bipartisan committee set up as part of the deal to avert a government shutdown as failed to reach a deal on cutting spending.

Barack Obama has blamed Republicans for failing to strike a deal in the deficit reduction committee, co-chaired by Democrat senator Patty Murray (left).
Barack Obama has blamed Republicans for failing to strike a deal in the deficit reduction committee, co-chaired by Democrat senator Patty Murray (left).
Image: Carolyn Kaster/AP

THE SO-CALLED ‘SUPER-COMMITTEE’ set up by the United States Congress to try and find ways of cutting the country’s mammoth government spending has collapsed without a deal – causing new partisan tensions in Washington.

The committee’s two chairmen, Democratic senator Patty Murray and Republican congressman Jed Hensarling, said in a statement that they would not be able to strike a deal before its deadline on December 23.

“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,” they said.

“We are deeply disappointed that we have been unable to come to a bipartisan deficit reduction agreement, but [...] we want to express our appreciation to every member of this committee.”

The committee was set up to try and find $1.2 trillion in spending cuts and new tax increases over the coming ten years; without a deal, a series of mandatory budget cuts, outlined in the deal to avert a shutdown earlier this year, will take their place.

At least half of that amount will have to come from military spending – a move which will be badly received by many in Washington, who regard defence spending as virtually sacrosanct.

The BBC explains that the other half will have to come from domestic spending, though programmes like Medicaid and social security will be safeguarded from the cuts.

Barack Obama blamed Republicans for the committee’s failure to make any progress, but refused to rule out a renewed attempt at striking a bipartisan deal.

The Guardian reports that Obama threatened to veto any attempt by legislators to write the mandatory debt cuts out of the law – saying there were “no easy off ramps on this one”. Presidents rarely threaten to use the veto, which requires a two-thirds majority to overrule.

Republicans responded by claiming that Obama had failed to show any leadership in the crisis and that he could have sought to intervene and strike a deal if he had wanted to.

AP cited sources who said a “long-running war” over tax cuts introduced under George W Bush had doomed the committees chances, saying Republicans wanted to make the cuts permanent while Democrats wished to limit them to those on lower incomes.

Aside from the political impact, the mandatory cuts in government spending will also have a major economic impact: the government is singularly responsible for massive chunks of the spending that helps to make up US economic growth.

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Gavan Reilly

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