The special U.S. congressional committee tasked with finding ways to trim the federal deficit by $1.2 trillion over the next decade has failed to reach an agreement.

The co-chairs of the 12-member, Joint Select Committee on Deficit Reduction made the announcement in a statement Monday. Democratic Senator Patty Murray and Republican Representative Jeb Hensarling said that “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 panel of six Republicans and six Democrats had a Monday night deadline to produce the deal. With no deal, massive automatic cuts to defense and domestic programs will be triggered, beginning in January 2013.

U.S. President Barack Obama later issued a statement threatening to veto any effort to undo the automatic spending cuts. He said, “there are no easy off ramps on this one.”

Democratic and Republican lawmakers are blaming each other for the collapse of the effort.

Democratic Senate Majority Leader Harry Reid said that for the good of the country, Democrats were prepared to strike a grand bargain that would have made painful cuts while asking millionaires to pay their fair share. He said Republicans never came close to meeting Democrats halfway.

U.S. Senate Republican Leader Mitch McConnell said that in the end, an agreement proved impossible because Democrats would not accept any proposal that did not expand the size and scope of government.

A long-time U.S. government economic official, Alice Rivlin, criticized the lack of an agreement, saying it was a “huge opportunity missed.”

Some Republican lawmakers are calling for limiting the defense cuts. But with the U.S. heading into a presidential election campaign in 2012, the debate over spending priorities — for defense as well as health care — is expected to be contentious. Many lawmakers also will be running for re-election next year.

The committee was formed in August when the Senate and House of Representatives were not able to resolve the same dispute in order to raise the U.S. debt ceiling. The U.S. government came within hours of being unable to pay its debts and the country's credit rating was downgraded for the first time in history.

President Obama had not been involved in the committee's efforts, but had called on the panel to make tough choices and “do its job.”