Erskine Bowles, Alan Simpson, Alice Rivlin and Pete Domenici appear before the supercommittee. The bipartisan group faces a Nov. 23 deadline to agree on a debt-reduction plan.

By Lori Montgomery and Rosalind S. Helderman, Published: November 19

The congressional committee tasked with reducing the federal deficit is poised to admit defeat as soon as Monday, and its unfinished business will set up a year-end battle over emergency jobless benefits and an expiring payroll tax holiday.

Those provisions are among a host of measures set to lapse at the end of December. During nearly three months of negotiations, the “supercommittee” had been weighing whether to extend at least some of them as part of a broader plan to shave a minimum of $1.2 trillion over the next decade.

Democrats and many economists consider particularly urgent the need to extend jobless benefits and the one-year payroll tax cut. With national unemployment stuck at 9 percent, and the ranks of the long-term unemployed at record levels, the government is providing up to 99 weeks of support to about 3.5 million people.

Meanwhile, the payroll tax cut, enacted last December, allows most American workers to keep an additional 2 percent of their earnings, a boon to tight household budgets as well as the economic recovery. Economists at J.P. Morgan Chase recently estimated that if Congress does not extend the two measures, economic growth next year could take a hit of as much as two percentage points — enough to revive fears of a recession.

Time is also running out for doctors who see Medicare patients. These physicians are scheduled to absorb a 30 percent cut in government reimbursements in January. A long list of tax breaks, including an inflation adjustment that protects more than 30 million families from paying the alternative minimum tax, also will be eliminated unless Congress acts.

Although many of the expiring provisions have received bipartisan support in the past, this year they face a welter of political obstacles, none more important than cost. Extending them all through 2012 threatens to add nearly $300 billion to annual budget deficits — and therefore to future borrowing — darkening the nation’s fiscal outlook at the very moment lawmakers had hoped to reassure financial markets with fresh savings.

Sen. Jeff Sessions (Ala.), the ranking Republican on the Senate Budget Committee, said he was uneasy about extending the payroll tax holiday, calling the national debt “a greater threat to us” than the weak economy.

“If the supercommittee fails, I think there will be a stark realization by every member of the U.S. Senate that we’re at the end of the year and these complex challenges have not been dealt with,” Sessions said. “It’s likely to be a really difficult period.”

The policy battle comes as the parties are gearing up for a high-stakes election season dominated by economic concerns, with both the White House and Congress in play. The political pressure that has helped keep the 12-member supercommittee from compromising on hot-button issues such as taxes is sure to grow more intense.

The panel remained gridlocked Saturday with the clock ticking toward a deadline of midnight Monday. Although the official deadline is midnight Wednesday, the committee is legally barred from voting on any plan that was not made public at least 48 hours in advance.

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