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Entries in Supercommittee (6)

Tuesday
Nov222011

Will Wall Street Rebound After Supercommittee Failure?

Mario Tama/Getty Images(NEW YORK) -- Coming off the heels of a failed attempt by Congress members to reach a deal on the nation's deficit, Wall Street is holding fairly steady ahead of Tuesday's opening bell, with stock futures mostly flat.

On Monday, reports that the Congressional Joint Select Committee on Deficit Reduction would not succeed in reaching an agreement before Wednesday's deadline sent stocks plummeting.  The Dow Jones Industrial Average sank 249 points, the Nasdaq fell 49 and the S&P 500 lost 23.

Shortly after the stock market closed, the 12 members of the so-called "supercommittee" confirmed the speculation, announcing that they had failed to come up with a plan to cut at least $1.2 trillion from the federal deficit over the next 10 years.

Overseas on Tuesday, European stocks are trading mostly higher, while Asian stocks closed mixed.  Australia's S&P/ASX 200 dropped 0.72 percent, Japan’s Nikkei index shed 0.40 percent and China's Shanghai Composite dipped 0.10 percent.  South Korea’s Kospi, on the other hand, added 0.34 percent, while Hong Kong’s Hang Seng gained 0.14 percent.

Copyright 2011 ABC News Radio

Monday
Nov212011

Deal or No Deal, Downgrade from Moody’s Unlikely

Hemera/Thinkstock(WASHINGTON) -- With the members of the congressional supercommittee teetering on the cusp of failure, many are worried about the potential for a U.S. credit downgrade, but one Moody’s economist says that his firm is not likely to downgrade U.S. debt because it expected Congress to fail from the start.

“You know, it’s all relative to expectations and investor expectations with regard to the committee I think are -- have been and are still very, very low,” Moody’s economist Mark Zandi said on Fox News Sunday.

The committee has until Wednesday to complete and score a final deal, but last minute political posturing and blame games have led many to believe that Congress won’t meet the Thanksgiving deadline.  If that happens, Congress will have one year before supercommittee provisions kick in with $600 billion in automatic cuts from the Pentagon budget and 2 percent across-the-board cuts to Medicare providers’ payments.

Cuts of that magnitude would, in theory, calm the markets enough to prevent financial calamity.

“So this shouldn’t foster a downgrade or a run on the market or anything like that.  The $1.2 trillion in savings occurs one way or the other,” Republican Sen. Jon Kyl said on Meet the Press.

But Zandi also pointed to other looming Congressional deadlines, including an extension to unemployment benefits, a Medicare doctor payment fix, a patch to the alternative minimum tax and an extension to the payroll holiday, all of which would have a significant effect on the economy if Congress failed to act by the end of the year.

Copyright 2011 ABC News Radio

Monday
Nov212011

Stocks Take Tumble as Supercommitee Stalls

Spencer Platt/Getty Images(NEW YORK) -- Stocks took a tumble on Monday following reports that the Congressional Joint Select Committee, or supercommittee, have failed to reach an agreement on spending cuts and tax increases to trim the deficit by the deadline of Nov. 23.

The Dow Jones Industrial Average dropped 290 points or over 2.4 percent to 11,511 around 12:05 p.m. ET and the Nasdaq was down 2.4 percent to 2,511.

In addition to the European debt crisis, investors are concerned that the failure to reach an agreement may lead to another credit downgrade for U.S. bonds and thus higher borrowing costs for the government.

Without a deficit reduction agreement, $1.2 trillion in "sequester caps," or automatic cuts, will be implemented. The cuts will affect a range of programs from Medicare and Medicaid to the Pentagon.

Copyright 2011 ABC News Radio

Monday
Nov212011

Supercommittee Deadline: Seniors Spared from Bulk of Automatic Cuts

Ingram Publishing/Thinkstock(WASHINGTON) -- With less than three days before its midnight deadline, the 12-member Congressional supercommittee is expected to announce on Monday that they did not reach a deal to cut $1.2 trillion from the federal budget over the next 10 years.

While Congressional aides stress a last-minute Hail Mary pass is still possible, deep divides over taxes are still shaking the foundations of any prospective -- and as of now unlikely -- deal.

This race-the-clock game has already played out twice this year, but this time there is no looming government shutdown or imminent debt default.  Instead, there are $1.2 trillion in automatic, across-the-board budget cuts split evenly between defense and domestic spending that will take effect in 2013 in the absence of a deal.

Defense Secretary Leon Panetta explained on Capitol Hill last week that the cuts will be "devastating" to the U.S. military.

The automatic cuts may not be so devastating on the non-defense spending side of the equation, however. Both Medicaid and Social Security are spared from the funding reductions and Medicare cuts are limited to 2 percent of the entitlement program’s budget.

Budget hawks looking for significant spending reductions herald the automatic cuts as real deficit-reduction.  And entitlement program defenders claim the limited cuts -- which include exceptions for the poor and disabled -- are less damaging than any that are likely to come out of a supercommittee deal.

“I think failure is a success,” said Michael Tanner, a senior fellow at the conservative CATO Institute.  “I think that a supercommittee that does not come to an agreement is more likely to achieve real cuts than one that does.”

Under the automatic cuts, or sequestration, Medicare will lose about $123 billion between 2013 and 2021.  But that entire amount will come out of the pockets of doctors and hospitals, not senior citizens.

That doesn’t mean the many-billion-dollar cuts will be painless.

Tanner said that slashing the amount the federal government reimburses health care providers who care for Medicare enrollees could make it more difficult for senior citizens to find doctors that will care for them.

“About 12 percent of physicians already will not accept Medicare patients and a larger number are not accepting new patients,” Tanner said.  “If you further reduce reimbursements, you’re liable to find additional physicians saying it’s just not worth it.”

Copyright 2011 ABC News Radio

Monday
Nov212011

Another Week of Losses Ahead for Wall Street?

Hemera/Thinkstock(NEW YORK) -- As the clock winds down for the so-called supercommittee to reach a deal on the nation's deficit, Wall Street appears poised on Monday to extend its losses from last week, with stock futures down ahead of the opening bell.

On Friday, the Dow Jones Industrial Average managed to add 25 points to close out a volatile week, while the Nasdaq lost 15 and the S&P 500 gave up a fraction of a point.

Investors are reacting in part to reports that the 12-member bipartisan committee has failed to reach a consensus on a plan to make at least $1.2 trillion in budget cuts ahead of Wednesday's deadline.

The news also took a toll on overseas markets: European stocks are trading lower on Monday and Asian stocks closed down.  Hong Kong’s Hang Seng sank 1.44 percent, South Korea’s Kospi shed 1.04 percent, Australia’s S&P/ASX 200 fell 0.34 percent, Japan’s Nikkei index dropped 0.32 percent, and China's Shanghai Composite lost 0.06 percent.

Copyright 2011 ABC News Radio

Sunday
Nov202011

Marco Rubio: White House Failed to Lead on Supercommittee

iStockphoto/Thinkstock(NEW YORK) -- Senator Marco Rubio, R-Fla., blamed the White House for a "lack of leadership" in steering the congressional supercommittee toward an agreement, saying political strategy and the hope of running against a "do-nothing Congress" is guiding the administration.

"I think it's very difficult for the Democrats on that committee to enter into a negotiation, not knowing where the White House is," Rubio told "This Week" anchor Christiane Amanpour. "They don't want to get their legs cut out underneath them as they agree to some entitlement reform measures that later on the White House decides they don't want to support in an election year."

"I hate questioning people's motives, but I do believe that there's political strategy involved here. And I certainly think the president would like to run against a do-nothing Congress," Rubio added. "But I hope that doesn't stand in the way of meaningful legislation, particularly out of the supercommittee."

Rubio voted against this summer's debt ceiling compromise and opposed the formation of the supercommittee. But he said he hopes it succeeds in the coming days "because so much is at stake."

However, Senator Chris Coons, D-Del., said that Republican failure to consider a balanced approach that includes significant revenue increases as well as budget cuts has blocked efforts at compromise.

"In my view, my party's the one that continually advocates for everything on the table, for a broad and balanced solution that includes revenue as well as considering entitlements," Coons said.

As the congressional supercommittee stands on the brink of failure, Coons and Rubio are pushing forward with a rare bipartisan effort on jobs, hoping to spur action on measures that both Republicans and Democrats support.

The first-term senators have introduced the AGREE Act – the American Growth, Recovery, Empowerment and Entrepreneurship Act – putting together elements from existing jobs bills that have gained bipartisan support, hoping that passage of the economic measures will spur confidence in Washington.

Copyright 2011 ABC News Radio







ABC News Radio