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As Blame Game Erupts, Debt Panel Appears Ready to Admit Failure

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Sept. 13, 2011: Members of the Joint Select Committee on Deficit Reduction meet on Capitol Hill in Washington.AP

A special deficit-reduction Super Committee appears likely to admit failure on Monday, unable or unwilling to compromise on a mix of spending cuts and tax increases required to meet its assignment of saving taxpayers at least $1.2 trillion over the coming decade.

The panel is sputtering to a close after two months of talks in which the members were never able to get close to bridging a fundamental divide over how much to raise taxes to address a budget deficit that forced the government to borrow 36 cents of every dollar it spent last year.

Republicans and Democrats on the committee can't agree on much. But as the deficit-cutting panel careens toward a Wednesday deadline without a deficit-cutting deal, they can agree on this -- it's all the other side's fault.

In separate interviews across Washington Sunday, members of the committee charged with finding at least $1.2 trillion in savings hurled recriminations at one another for their apparent failure to strike an agreement. Sources close to the discussions indicate that, despite scattered last-ditch appeals for a deal, members of the panel are trying to figure out how to bring the process formally to a close.

The ignominious end for the committee once touted as a must-succeed effort to rein in the debt tees up what is sure to be a protracted blame game.

Republicans said Sunday they offered Democrats a "breakthrough" deal by putting tax hikes on the table, but that Democrats never got serious about curbing entitlements while insisting on "huge" tax increases instead.

Democrats said they put every one of their "sacred cows" on the chopping block, but that Republicans tried to exploit the process to extend, even lower, the tax rates set during the George W. Bush administration.

"We are not a tax-cutting committee. We're a deficit-reduction committee," Sen. John Kerry, D-Mass., said.

The panel was established over the summer as a condition for raising the debt ceiling.

As analysts warn about the economic implications of failure, as well as the political punishment members of Congress could endure at the hands of frustrated voters, lawmakers worked to explain away the impasse as the proverbial sand slipped through the hourglass. The committee technically has until Wednesday to reach a deal, but officials have said Monday -- or even Sunday night -- is the de facto deadline, because budget scorekeepers would need time to review the package.

A visibly riled-up Kerry dismissed GOP accusations as "nonsense" Sunday on NBC's "Meet the Press."

"If this weren't so serious, I might laugh," Kerry said, warning about the "real threat" of a credit downgrade and financial market revolt.

"Just the confusion and gridlock is enough to say to the world, 'America can't get its act together,'" Kerry said.

To hear the senator and former Democratic presidential candidate tell it, there were two things that prevented members from reaching a deal -- a GOP calculation that they could just win the Senate and White House in 2012 and write their own deal, and "their insistence, insistence, insistence on the Grover Norquist pledge and extending the Bush tax cuts."

Norquist, head of the anti-tax-hike Americans for Tax Reform, emerged as the Democrats' bogeyman during the Super Committee process, with Democrats claiming Republicans' allegiance to the Norquist cause stood in the way of a deal.

Kerry said Democrats put "every single cow on the table," but Republicans insisted on extending the Bush tax cuts in the process.

"There's one thing standing between us and ... doing $1.2 trillion and that one thing is the Republican unwillingness to not push for the Bush tax cuts to be extended now," Kerry said.

But Sen. Jon Kyl, R-Ariz., said that dealing with the Bush tax cuts was not originally part of the game plan.

He said Republicans wanted to use the panel to reform entitlements, but "our Democratic friends were never willing to do the entitlement reform." Kyl said they started fiddling with the Bush-era rates after Democrats insisted on tax hikes. Republicans agreed to close loopholes and take other steps to raise revenue -- in exchange they wanted to extend the Bush-era rates and reduce those rates at the top, while still raising about $250 billion.

"On the Republican side, you had the one true breakthrough," Kyl said.

Sen. Pat Toomey, R-Pa., also a member of the committee, described the tax offer as "a reach for us to put that on the table."

"Grover Norquist was very critical of me personally and this idea," Toomey said on CBS' "Face the Nation."

Rep. Jeb Hensarling, R-Texas, the GOP co-chairman of the committee, said on "Fox News Sunday" that his side never saw Democrats willing to offer a proposal "that actually solves the problem" of entitlements. Without explicitly declaring failure, he described the situation on the committee as a "huge blown opportunity."

But Sen. Patty Murray, D-Wash., Hensarling's Democratic counterpart, again disputed the claim that Democrats weren't willing to deal on entitlements.

"Democrats have made some really tough decisions and come to some pretty tough choices that we're willing to put on the line on entitlements, on spending cuts, but only if the Republicans are willing to cross the line on the Bush tax cuts and be willing to say revenues have to be a part of this solution," she said on CNN's "State of the Union."

Murray suggested there's still time for compromise.

"We have until the day before Thanksgiving. We have to file a bill by tomorrow. And so again, I'm at the table. I want to solve this," she said.

But the prospect for a deal has been steadily fading for days. While Super Committee members hit the Sunday show circuit, no in-person meetings were scheduled over the weekend. Many lawmakers left Washington Friday for the Thanksgiving break.

Without a deal in place, the law that established the Super Committee provides for $1.2 trillion in automatic cuts split between defense and a host of other programs.

Lawmakers have described those particular cuts as onerous, and the Pentagon has pleaded with Congress not to let them go into effect. With the cuts not set to go into effect until 2013, there's still time for lawmakers to fiddle with the formula and at least shield the military from some of the pain.

But any attempt to reduce the total size of the cuts could cause problems.

Moody's economist Mark Zandi told "Fox News Sunday" the markets and rating agencies will be watching to see if Congress keeps the cuts in place.

"If they don't, then that will be the fodder for problems in the financial markets and the economy," Zandi said.

The Associated Press contributed to this report.