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No deal for US 'super-committee' No deal for US 'super-committee'
(about 1 hour later)
The heads of a congressional committee tasked with reducing the deficit by $1.2tn (£762bn) have announced it has failed to come to an agreement.The heads of a congressional committee tasked with reducing the deficit by $1.2tn (£762bn) have announced it has failed to come to an agreement.
The panel of six Republicans and six Democrats confirmed after the New York Stock Exchange closed that their work had ended without a deal.The panel of six Republicans and six Democrats confirmed after the New York Stock Exchange closed that their work had ended without a deal.
The outcome means automatic cuts outlined in the bill that created the committee will go into effect in 2013.The outcome means automatic cuts outlined in the bill that created the committee will go into effect in 2013.
The US national debt has just risen above $15tn.The US national debt has just risen above $15tn.
"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," Democratic Senator Patty Murray and Republican Representative Jeb Hensarling said in Monday's joint statement."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," Democratic Senator Patty Murray and Republican Representative Jeb Hensarling said in Monday's joint statement.
"We remain hopeful that Congress can build on this committee's work and can find a way to tackle this issue in a way that works for the American people and our economy," it added."We remain hopeful that Congress can build on this committee's work and can find a way to tackle this issue in a way that works for the American people and our economy," it added.
Without a deal, $1.2tn cuts will be applied to government spending over the next 10 years.Without a deal, $1.2tn cuts will be applied to government spending over the next 10 years.
The cuts are to be split between defence and domestic budgets. A few programmes are to be protected, including Social Security and Medicaid.The cuts are to be split between defence and domestic budgets. A few programmes are to be protected, including Social Security and Medicaid.
Blame gameBlame game
Democrats say the Republicans are solely to blame for the failure - because they ruled out tax rises for the wealthiest Americans.Democrats say the Republicans are solely to blame for the failure - because they ruled out tax rises for the wealthiest Americans.
Republicans say Democrats were never serious about making cuts to entitlement programmes for the elderly and the poor.Republicans say Democrats were never serious about making cuts to entitlement programmes for the elderly and the poor.
In a White House news conference later on Monday, President Barack Obama said it was Republicans' fault.In a White House news conference later on Monday, President Barack Obama said it was Republicans' fault.
"There's still too many Republicans in Congress that have refused to listen to the voices of reason and compromise," he said."There's still too many Republicans in Congress that have refused to listen to the voices of reason and compromise," he said.
Mr Obama said he would veto any attempt to reverse the automatic cuts, adding that there was nothing preventing Congress from coming up with a new plan to reduce the deficit by $1.2tn to avoid the cuts.Mr Obama said he would veto any attempt to reverse the automatic cuts, adding that there was nothing preventing Congress from coming up with a new plan to reduce the deficit by $1.2tn to avoid the cuts.
US voters are already deeply disillusioned with Washington. US voters are already deeply disillusioned with Washington. In some polls, Congress's approval rating is at 9%.
The BBC's Steve Kingstone in Washington says the political finger-pointing is likely to continue right through to next November's congressional and presidential elections.The BBC's Steve Kingstone in Washington says the political finger-pointing is likely to continue right through to next November's congressional and presidential elections.
As the reductions triggered by Monday's announcement are not set to take effect until January 2013, correspondents say that would give lawmakers time to change or repeal the automatic cuts.As the reductions triggered by Monday's announcement are not set to take effect until January 2013, correspondents say that would give lawmakers time to change or repeal the automatic cuts.
Republican senators John McCain of Arizona and Lindsey Graham of South Carolina are already working on legislation that would undo the automatic defence reduction, replacing it with cuts across the federal government, according to the Associated Press.Republican senators John McCain of Arizona and Lindsey Graham of South Carolina are already working on legislation that would undo the automatic defence reduction, replacing it with cuts across the federal government, according to the Associated Press.
Secretary of Defense Leon Panetta warned on Friday that reductions would lead to a "hollow force".Secretary of Defense Leon Panetta warned on Friday that reductions would lead to a "hollow force".
However, Mr Panetta said on Monday that he agreed with the president that Congress should not repeal the automatic cuts.
"Congress cannot simply turn off the sequester mechanism, but instead must pass deficit reduction at least equal to the $1.2 trillion it was charged to pass under the Budget Control Act," Mr Panetta told the Associated Press.
The panel's failure to reach a deal had already been evident on Sunday as its members took to political talk shows to cast blame.
A last-minute conference on Monday attended by some committee members could not salvage an agreement.
"Our Democratic friends were never able to do the entitlement reforms," Republican Senator Jon Kyl said on NBC TV. "They weren't going to do anything without raising taxes."
Democratic Senator Patty Murray, one of the committee's co-chairs, told CNN that the Republicans' position on taxes was the sticking point.
"The wealthiest Americans, who earn over a million a year have to share, too," she said. "And that line in the sand, we haven't seen Republicans willing to cross yet."
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 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 default on US debt payments.
Its members were instructed to create a proposal of at least $1.2tn in savings by 23 November.Its members were instructed to create a proposal of at least $1.2tn in savings by 23 November.
The deadline was effectively Monday, as any plans agreed by the committee would have needed to be submitted for analysis by the Congressional Budget Office 48 hours before the formal deadline.The deadline was effectively Monday, as any plans agreed by the committee would have needed to be submitted for analysis by the Congressional Budget Office 48 hours before the formal deadline.