US voters are already deeply disillusioned with WashingtonThe heads of a congressional committee tasked with finding $1.2tn (£762bn) in spending cuts have announced it has failed to come to an agreement.
The panel of six Republicans and six Democrats confirmed after the New York Stock Exchange closed that their work had ended without a deal.
The outcome means automatic cuts outlined in the bill that created the committee will go into effect in 2013.
The US national debt has just risen above $15tn.
"After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee's deadline," Democratic Senator Patty Murray and Republican Representative Jeb Hensarling said in Monday's joint statement.
"We remain hopeful that Congress can build on this committee's work and can find a way to tackle this issue in a way that works for the American people and our economy," it added.
Blame gameDemocrats say the Republicans are solely to blame for the failure - because they ruled out tax rises for the wealthiest Americans.
Republicans say Democrats were never serious about making cuts to entitlement programmes for the elderly and the poor.
In a White House news conference later on Monday, President Barack Obama faulted Republicans for the lack of a deal.
"There's still too many Republicans in Congress that have refused to listen to the voices of reason and compromise," he said.
Mr Obama said he would veto any attempt to reverse the automatic cuts, adding that there was nothing preventing Congress from coming up with a new plan to reduce the deficit by $1.2tn to avoid the cuts.
US voters are already deeply disillusioned with Washington.
The BBC's Steve Kingstone in Washington says that as the politicians scramble to avoid being blamed, the finger-pointing is likely to continue right through to next November's congressional and presidential elections.
The reductions triggered by the failure to reach a deal will not be put into place until January 2013.
Correspondents say that would allow lawmakers time to change the nature of the automatic cuts.
Republican senators John McCain of Arizona and Lindsey Graham of South Carolina are already working on legislation that would undo the automatic defence reduction, replacing it with cuts across the federal government.
Secretary of Defense Leon Panetta warned on Friday that reductions would lead to a "hollow force".
The deficit-reduction committee was set up in August, the result of a last-minute deal between the two sides in Congress to raise the debt ceiling and avert a default on US debt payments.
Its members were instructed to create a proposal of at least $1.2tn in savings by 23 November.
The deadline was effectively Monday, as any plans agreed by the committee would have needed to be submitted for analysis by the Congressional Budget Office 48 hours before the formal deadline.
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