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US talks on cutting deficit are on the verge of failure 'Super-committee' on brink of US deficit failure
(about 1 hour later)
Talks in Washington aimed at cutting the US government's borrowing are on the verge of failure.Talks in Washington aimed at cutting the US government's borrowing are on the verge of failure.
A special Congressional committee had been charged with finding $1.2tn (£762bn) in savings by Wednesday. A congressional "super-committee" had been charged with finding $1.2tn (£762bn) in savings to avoid automatic deep spending cuts.
But the talks between Democrats and Republicans are widely reported in the US media to have collapsed, with a formal joint-statement to that effect expected later on Monday. But the talks between Democrats and Republicans are widely reported in the US media to have collapsed, with formal confirmation expected later on Monday.
Meanwhile, the US national debt has just risen above $15tn (£9.5tn).Meanwhile, the US national debt has just risen above $15tn (£9.5tn).
The committee was set up in August, a result of a last-minute deal between the two sides in Congress to raise the debt ceiling and avert a potential default on US debt payments. The deficit-reduction committee was set up in August, the result of a last-minute deal between the two sides in Congress to raise the debt ceiling and avert a potential default on US debt payments.
Its members were instructed to find at least $1.2tn in savings or face automatic cuts in defence and domestic spending of an equivalent amount. Its members were instructed to find at least $1.2tn in savings by 23 November. If they failed to agree, they would have to face the prospect of being held responsible for automatic cuts to defence and domestic spending of an equivalent amount.
Reuters reported that the Republican and Democrat heads of the 12-member committee will issue a statement later on Monday saying they have been unable to reach a deal. Much of the burden of the automatic cuts is expected to fall on the defence and national security budgets, despite the Pentagon already facing a $450bn reduction in its budget.
On Friday, the committee's Republican co-chairman Jeb Hensarling told reporters that members would meet over the weekend if necessary to "try and find sufficient common ground". 'Little common ground'
The Republican and Democratic heads of the 12-member committee are expected to issue a statement later on Monday saying they have been unable to reach a deal.
Disagreements have centred on whether tax increases should form part of the budget reduction measures, with Democrats in favour of such rises but Republicans opposed.Disagreements have centred on whether tax increases should form part of the budget reduction measures, with Democrats in favour of such rises but Republicans opposed.
Republicans had also demanded cuts in entitlement programmes, such as social security, medicare and medicaid - something that Democrats had shown willingness to permit, but only in return for tax rises on the rich that were not forthcoming from the other side. A last-minute proposal that included some new taxes raised hopes in the final week of negotiations, but could not muster enough support.
On Friday, the committee's Republican co-chairman, Jeb Hensarling, told reporters that members would meet over the weekend if necessary to "try and find sufficient common ground".
But on Sunday several committee members appeared on US political talk shows and confirmed that the panel's work had all but ended.
Republicans had also demanded cuts in entitlement programmes, such as social security, Medicare and Medicaid - something that Democrats had shown willingness to permit, but only in return for tax rises on the rich that were not forthcoming from the other side.