Congressional supercommittee fails to cut federal deficit by $1.2 trillion

A US Congressional supercommittee responsible for reaching a possible deficit reduction agreement announced Monday that it has failed to cut the federal deficit by $1.2 trillion.

“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,” according to a joint statement by the co-chairmen of the committee, as reported by the Washington Post.

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The co-chairmen are Sen. Patty Murray (D-Wash.) and Rep. Jeb Hensarling (R-Tex.).

“Despite our inability to bridge the committee’s significant differences, we end this process united in our belief that the nation’s fiscal crisis must be addressed and that we cannot leave it for the next generation to solve,” the statement said. “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.”

The special debt-reduction supercommittee had been tasked with coming up with $1.2 trillion in spending cuts.

Given that a deal was not reached, there will not be an automatic spending cuts of that amount beginning in 2013. The Congressional Budget Office has estimated that domestic programs would be cut by 7.8 percent, Medicare spending would be cut by 2 percent and defense programs would be cut by 10 percent.

In addition to not reaching a deal on cuts, the supercommittee failed to agree on who was at fault. Both the Democrats and the Republicans blamed each other.

The news of the failure had been expected, and markets Monday dropped, CNN reported.

"The Dow Jones Industrial Average fell 248 points Monday, with a minor recovery after being down more than 300 points earlier in the afternoon," it stated.