The latest bid to find a long-term solution to the US debt crisis looked doomed to fail Sunday as lawmakers remained at odds over cutting social programs and raising taxes on the rich.
A bipartisan "supercommittee" is racing against a Wednesday deadline to reach agreement. Failure would trigger mandatory cuts from January 2013, but that timeframe means Congress can wriggle out of the supposed ultimatum.
CNN, citing both Democratic and Republican aides, reported that the 12 members of the supercommittee had already accepted the failure of talks and were planning a press conference on Monday to formally announce the impasse.
Congressional stalemate over how to tackle America's $15 trillion budget deficit is adding to global economic concerns dominated by the financial woes that are threatening to unravel Europe's cherished monetary union.
"It is a very serious situation, unprecedented in many ways," said IMF chief Christine Lagarde, warning of a worst-case scenario of social unrest if continued stalled growth and high unemployment keep markets depressed.
Speaking to CBS's "60 Minutes," the former French finance minister, who replaced Dominique Strauss-Kahn at the helm of the International Monetary Fund in July, was scathing about the "political bickering" in the United States.
"I would hope that on a bipartisan basis, both Democrats and Republicans can come to terms, in their supercommittee, about the deficit objectives and the deficit-cutting measures, and the debt... that is so much needed in the markets," she said.
The current gridlock in the congressional supercommittee follows partisan infighting back in July and August over raising the debt ceiling that threatened to plunge the United States into financial chaos.
Congress finally reached an 11th hour deal, but not before blue chip stocks on Wall Street plunged more than 2,000 points and Standard & Poor's cut America's sterling triple-A credit rating.
The logjam over the economy is already shaping the campaign for the November 2012 elections in which President Barack Obama is seeking to defy the dire economic climate and secure a second term.
