Supercommittee Succumbs To Gridlock; Ready To Admit Failure

Reuters, Bloomberg, CNN, and AP are all reporting that the so-called super-committee is ready to admit defeat and is now focused on how to announce the failure of the committee to agree on $1.2 trillion in deficit reduction.

Bloomberg is reporting that according to an aide, who wasn’t authorized to discuss internal matters publicly and requested anonymity, said in an e-mail Sunday that it was highly unlikely that the talks could be salvaged.

As has become standard operating procedure in Washington these days, Democrats and Republicans each blamed the other for the stalemate that has all but doomed chances for an agreement. Republican Jon Kyl of Arizona said in an interview on 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'."

On the other side of the debate, Democrats said that Republicans on the supercommittee were simply unwilling to budge on the issue of any tax increases.

Thus, the deadlock appears to center on two fundamental differences: the Republicans oppose any tax increases while the Democrats refuse to cut federal spending on social security and/or healthcare benefits without an accompanying increase in taxes.

Recall that Monday is the deadline for the Congressional Budget Office to receive a plan that it can analyze before the committee’s Nov. 23 target date for reaching an agreement. However, Wednesday is the official deadline for an agreement to be reached.

Some members are still suggesting that a deal is possible by Monday night's deadline to propose legislation, though most sources appear to acknowledge that a deal now is unlikely given the intransigence on both sides.

"Nobody wants to give up hope. Reality is, to some extent, starting to overtake hope," Representative Jeb Hensarling, the panel's Republican co-chairman, said on "Fox News Sunday."

Strangely, the White House has stayed out of the debate. While some will argue that entering the fray to come up with a plan is political suicide others suggest that avoiding the debate displays a lack of leadership.

The bottom line is that both parties appear to want this debate to be settled by voters in November, 2012.

Recall that if the super-committee fails to come up with a plan, the failure will trigger $1.2T in automatic spending cuts beginning in 2013. That is unless Congress acts to override the prior legislation that would implement those cuts.

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