US debt panel deadlocked despite White House prodding

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Despite prodding from the White House, a US congressional 'supercommittee' remained deadlocked Saturday on forging a deal to cut $1.2 trillion from government deficits over 10 years.

The 12-member panel had till Monday to make public at least a tentative plan and till Wednesday to approve it or risk triggering painful automatic cuts shared between some social programs and military spending.

"We are painfully, painfully aware of the deadline that is staring us in the face," Representative Jeb Hensarling, the co-chair of the panel, told reporters Friday, after a closed-door meeting with fellow committee Republicans.

The White House sharply rebuffed calls from some Republicans for President Barack Obama, who was wrapping up a trip to Asia, to step in to try to break a partisan logjam likely to shape the campaign to the November 2012 elections.

"Avoiding accountability and kicking the can down the road is how Washington got into this deficit problem in the first place, so Congress needs to do its job here and make the kind of tough choices to live within its means that American families make every day," said spokeswoman Amy Brundage.

Hensarling said the committee would meet through the weekend if necessary to 'try to find sufficient common ground' on a solution to 'simultaneously address both our nation's jobs crisis and the debt crisis'.

Markets that should have been buoyed by some positive economic data during the week were instead held back by both the supercommittee deadlock and the failure in Europe to quell a debt crisis that threatens to spill overseas.

The Dow Jones Industrial Index finished the week down 2.9 percent from the previous Friday, while the S&P 500 pared 3.8 percent.

The congressional effort got a burst of urgency on Wednesday when the US government debt passed the $15 trillion mark, roughly equal to 99 percent of the size of the total US economy, a level economists consider perilous.

"We're exploring every angle right now," Democratic Representative and committee member Chris Van Hollen said after a separate meeting with senators from both parties who sit on the panel.

The committee, created in an August deal on raising the US debt limit, has locked up over Republican refusals of Democratic calls to raise taxes on the very wealthy in return for cuts to cherished social safety net programs.

"This is the divide right now, and we're still working. I hope we can get there but I don't know at this point," said Democratic Senator John Kerry, a panel member who sits on the senate's finance committee.

"If you're going to ask every average American who drives a car, goes to work, struggles each day to pay their bills, and they're going to somehow be part of the solution, to have something on the table that does not ask the wealthiest people in the country to share in, that would be unconscionable."

"Democrats stand united, as we have from day one, believing that great challenges before our country today means that all Americans the wealthiest among us need to participate," said Senator Patty Murray, Hensarling's Democrat counterpart.

Van Hollen played down talk that the committee could settle on a smaller deficit-cutting plan, with automatic cuts making up the shortfall, saying: "We're still focused on trying to get an agreement on the full amount."

Republicans have rejected tax hikes on the wealthiest Americans on grounds that they would cripple job-creating investment even as the brittle US economy labors under stubbornly high unemployment of more than nine percent.

They have also sought to lay the groundwork for repealing the military spending reductions.

Defense Secretary Leon Panetta has warned that the automatic cuts, which would kick in come January 2013, would pose a national security risk by leaving the Pentagon weaker, slower, and smaller than at any time since World War II.

Any deal would require majority approval on the committee, which is evenly divided between Democrats and Republicans, after which the full Congress would need to adopt it by December 23 to avoid the automatic cuts.