Debt panel likely set to quit

WASHINGTON - A special deficit-reduction supercommittee appears likely to admit failure Monday, unable or unwilling to compromise on a mix of spending cuts and tax increases required to meet its assignment of saving taxpayers at least $1.2 trillion over the coming decade.

The bipartisan congressional panel is sputtering to a close after two months of talks in which its members were never able to get close to bridging a fundamental divide over how much to raise taxes to address a budget deficit that forced the government to borrow 36 cents of every dollar it spent last year.

Failure by the panel would trigger about $1 trillion over nine years in automatic spending cuts to a wide range of domestic programs and the Pentagon budget, starting in 2013, according to the Congressional Budget Office.

Members of the 12-lawmaker panel, who include Sen. Pat Toomey (R., Pa.), spent their time Sunday in testy appearances on television talk shows, blaming one another for the impasse.

In a series of TV interviews, not a single panelist seemed optimistic about a last-minute breakthrough. And it was clear the two sides had never gotten particularly close, at least in the official exchanges of offers that were leaked to the media.

Aides said any remaining talks had broken off.

"There is one sticking divide. And that's the issue of what I call shared sacrifice," said Sen. Patty Murray (D., Wash.), cochairwoman of the panel, on CNN's State of the Union.

"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."

Republicans said Democrats' demands on taxes were simply too great and weren't accompanied by large enough proposals to curb the explosive growth of entitlement programs such as Medicare and Medicaid.

Sen. Jon Kyl (R., Ariz.) told NBC's Meet the Press: "If you look at the Democrats' position, it was, 'We have to raise taxes. We have to pass this jobs bill, which is another almost half-trillion dollars. And we're not excited about entitlement reform.' "

Toomey told CBS's Face the Nation that the process had been "enormously frustrating for me and for many of my colleagues."

Under the rules of the supercommittee, which was formed during the summer crisis over raising the U.S. borrowing limit, any plan would have to be announced Monday to allow time for drafting and assessing by the Congressional Budget Office before the panel's Wednesday deadline. But it appeared that Murray and her cochairman, Rep. Jeb Hensarling (R., Texas) would instead issue a statement declaring the panel's work at a close, aides said.

"Put a bow on it. It's done," said an aide to a supercommittee Republican.

The resulting trigger of automatic, across-the-board cuts, called a "sequester," would also generate $169 billion in savings from lower interest costs on the national debt.

Defense Secretary Leon Panetta said the required cuts of up to $454 billion to the Pentagon would be "devastating" and leave a "hollow force." Defense hawks of Capitol Hill promise they will not allow them to be that deep.

But that effort will be complicated by the insistence of other lawmakers that the overall amount of the budget cuts be left in place.

The panel's failure would also set up a fight within a battle-weary, dysfunctional Congress over renewing a 2-percentage-point payroll-tax cut and jobless benefits for the long-term unemployed; both are set to expire at the end of the year. Both proposals are part of President Obama's $447 billion jobs plan.

Extending the payroll-tax cut is not popular with many Republicans, but allowing it to expire could harm the economy, economists say. So, too, would a cutoff of jobless benefits averaging about $300 a week to millions of people who have been out of work for more than six months.

Serious negotiations ended Friday after Democrats on the supercommittee rejected a $644 billion offer comprising $543 billion in spending cuts, fees, and other nontax revenue, and $3 billion in tax revenue from closing a special tax break for corporate purchases of private jets. It also assumed $98 billion in reduced interest costs.

Officials familiar with the offer said it would save the government $121 billion by requiring federal civilian workers to contribute more to their pension plans, shave $23 billion from farm and nutrition programs, and generate $15 billion from new auctions of broadcast spectrum to wireless companies.

Democrats said the plan was unbalanced because it included barely any tax revenue.

Over the last couple of weeks, the two sides have made various offers and counteroffers, starting with a more than $3 trillion plan from Democrats that would have increased tax revenue $1.3 trillion in exchange for further cuts in agency budgets, a change in the measure used to calculate cost-of-living increases for Social Security beneficiaries, and curbs on the growth of Medicare and Medicaid.

Republicans countered with a $1.5 trillion plan that included a potential breakthrough - $250 billion in higher taxes gleaned as Congress passes a future tax-overhaul measure. But Democrats said it would have lowered tax rates for the wealthy too far while eliminating tax breaks that chiefly benefit the middle class.