The latest effort to cut the U.S. government's debt has apparently ended in failure.

Leaders of a special debt-reduction committee of the U.S. Congress planned to announce they had failed in their mandate from lawmakers to trim the federal debt by $1.2 trillion over the next decade. The 12-member “supercommittee” has a Monday night deadline to produce a deal, but Democratic and Republican lawmakers are already blaming each other for the collapse of the effort.

It is the third major attempt in the U.S. in the last year to cut the country's long-term debt. A plan from a bipartisan deficit commission also was shelved, and talks between President Barack Obama and House Speaker John Boehner for a large debt-cutting deal ended unsuccessfully several months ago.

If no deal is reached this time, massive automatic cuts to defense and domestic programs will be triggered beginning in January 2013.

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 will also be running for re-election next year.

With the demise of the U.S. debt talks, and continuing worries about the European debt crisis, world stock markets fell Monday — with markets in London, Paris and Frankfurt down two percent or more.

A prominent U.S. economist, Mark Zandi of Moody's Analytics, suggests the financial markets will not react greatly if the committee fails because, he says, expectations have always been low. But he says a long-term failure by the United States to confront its debt problem will shatter investor confidence.

The supercommittee's panel of 12 members, evenly divided between Republicans and Democrats, traded blame in interviews Sunday, saying they could not agree about whether and how to cut social programs and raise taxes.

The committee was formed in August when the Senate and the House of Representatives were unable 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.

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