Amid rancor, debt deal edges toward failure

WASHINGTON - On the brink of failure, members of a special deficit-cutting committee blamed each other Sunday for the intransigence that has gridlocked the panel in its quest to cut the deficit by at least $1.2 trillion over the coming decade.

"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,' " Republican Jon Kyl of Arizona said in a combative interview on NBC's "Meet the Press."

Fanning out to the sets of the Sunday morning talk shows, Democrats and Republicans blamed each other for a deepening impasse that has all but doomed chances for an accord. In a series of interviews, not a single panelist seemed optimistic about any last-minute breakthrough. Under the committee's rules, any plan would have to be unveiled Monday.

Democrats said that Republicans on the supercommittee were simply unwilling to move on tax increases that Democrats insist should be part of any package that emerges from the negotiations. And Republicans said Democrats' demands on taxes were too great, even in response to a scaled-back GOP offer made late last week.

"There is one sticking divide. And that's the issue of what I call shared sacrifice," said panel co-chair Sen. Patty Murray. "The wealthiest Americans who earn over a million a year have to share too. And that line in the sand, we haven't seen Republicans willing to cross yet," the Washington Democrat said on CNN's "State of the Union."

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On Saturday, Republicans floated an offer smaller than a $644 billion GOP plan leaked to the media late last week, said a lawmaker directly familiar with the panel's work. It too was rejected. The lawmaker required anonymity because of the secrecy of the talks.

The Republican co-chair of Congress' debt supercommittee offered a glum assessment of prospects for an agreement.

Texas Rep. Jeb Hensarling said "nobody wants to give up," but he also told "Fox News Sunday" that "the reality is to some extent starting to overtake hope." He said the panel's deadlock "was a failure in not seizing an opportunity."

The committee faces a Wednesday deadline. But members would have to agree on the outlines of a package by Monday to allow time for drafting and assessing by the Congressional Budget Office.

Panel members say they will be available for further talks Sunday in hopes of a final breakthrough and some last-minute offers on smaller deficit-cutting packages were possible. Also on the agenda is stage managing the group's disbandment.

The most likely outcome, aides said, would be a joint statement by Murray and Hensarling. He said it would not be "useful" to have a public session in which both sides would vote each other's plans down.

Republicans are demanding changes in so-called entitlement programs such as Medicare and Medicaid while Democrats are insisting on tax increases on the wealthy.

Over the past couple of weeks, the two sides have made a variety of offers and counter-offers, starting with a more than $3 trillion plan from Democrats that would have increased tax revenues by $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 reform measure. The plan was trashed by Democrats, however, who said it would have lowered tax rates for the wealthy too far while eliminating tax breaks that chiefly benefit the middle class.

Most recently, Republicans forwarded a smaller, face-saving $644 billion offer comprised of $543 billion in spending cuts, fees and other non-tax revenue, as well as $3 billion in 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.

"Our Democratic friends are unable to cut even a dollar in spending without saying it has to be accompanied by tax increases," Kyl said.

"We are unaware of any Democrat offer that didn't include at least $1 trillion tax increase on the American economy," Hensarling said.

Failure to reach agreement would trigger automatic across-the-board spending cuts to a wide variety of domestic programs and the Pentagon budget, starting in January of 2013. But both Defense Secretary Leon Panetta and many lawmakers say this automatic sequester would impose devastating cuts at the Pentagon.

"I hope it will be changed," Hensarling said. "Panetta said that cuts of that magnitude would hollow out our national defense."