US legislators fail to reach deficit deal

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US legislators fail to reach deficit deal

US legislators fail to reach deficit deal
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A US Congress ‘super-committee’ has failed to agree on how to cut 1.2 trillion dollars from the country’s budget deficit over the next decade

The debt-reduction panel made up six Republicans and six Democrats has abandoned its efforts to break a year-long partisan deadlock over taxes and spending.

Their failure to reach a deal means that automatic spending cuts will be triggered across a wide range of areas, including the military.

John Kerry, a Democratic senator representing the state of Massachusetts, said the US had failed to show on an ability to lead on economic policy.

“We had an opportunity to be able to show the world that the Congress of the United States knows how to govern and we had an opportunity to prove at a time that Europe is in a particular fragile economic situation,” he told reporters in Washington.

“(We had the opportunity to prove) that we were ready to show the way forward and even as we did so to make America a safe haven for investment and for money.”

President Barack Obama, accusing Republicans of scuttling the committee’s efforts by refusing to consider tax increases on the wealthy, said he would veto any effort to bypass the automatic trigger.

The three major rating agencies said there would be no immediate downgrade on US debt, which has now passed 15 trillion dollars.

Moody’s said it won’t lower its triple A rating, although Fitch will make a decision by the end of the month.

Standard and Poors has no plans for a downgrade. It lowered its rating to AA plus in August.