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Panel Fails to Reach Deal on Plan for Deficit Reduction

WASHINGTON — Leaders of the Congressional committee charged with finding at least $1.2 trillion in deficit reductions conceded on Monday that panel members had failed, setting up what is likely to be a yearlong political fight over the automatic cuts to a broad range of military and domestic programs that would go into effect starting in2013 as a result of their inability to reach a deal.
Speaking an hour after the committee’s failure was announced by its leaders in an e-mail statement, President Obama promised to veto any legislation that seeks to avoid the automatic cuts. The president also pledged that “one way or another” the deficit would be trimmed by at least $2.2 trillion, the only question being whether it was with a“scalpel, not a hatchet.”

“There will be no easy off-ramps on this one,” Mr. Obama said. His reference to $2.2 trillion includes $1 trillion in savings that both parties agreed to in August.

The committee’s failure appeared to alarm some state officials. In New York, Gov. Andrew M. Cuomo held a conference call with his Council of Economic and Fiscal Advisors to discuss the impact on the state,which he said “could lose approximately $5 billion in federal funding over 10 years beginning this coming fiscal year.”

The panel’s demise followed more than 10 weeks of bitter partisan division that seemed to seal the image of Congress, and all of Washington, as a place where nothing can be accomplished, even when the consequences of failure are clearly visible to the American people andabhorrent to both political parties.

In a statement, the panel’s leaders, Representative Jeb Hensarling, Republican of Texas, and Senator Patty Murray, Democrat of Washington, said, “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.”

Thestatement left open the possibility of a new stage of negotiations in the full Congress, where lawmakers will try to hammer out an agreement on a tax overhaul, changes to entitlement programs and new revenues as a way to avoid automatic across-the-board cuts over 10 years. “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 worksfor the American people and our economy,” it said.

Short-term matters, like the expiration at the end of this year of a payroll tax cut and jobless benefits for the long-term unemployed, will most likely be dealt with in stand-alone legislation or as bill amendments next month. But given the depth of the divisions between the parties, there is no guarantee of an agreement.

And a meeting ofthe minds on two central points — the scheduled expiration of the Bush tax cuts, which Republicans oppose, and scaling back entitlement programs, which Republicans accuse Democrats of having approached too modestly — seemed on Monday like a mirage.

Democrats in the Senate said they planned to use the Bush tax cuts, which expire at the end of next year, as leverage in future attempts to avoidlarge cuts to the budget.

Many Republicans said they would try to find a way to spare at least some of the automatic $500 billion in reductions to the Pentagon budget over the next 10 years. Representative Howard P. McKeon, chairman of the House Armed Services Committee, said on Monday that he would soon introduce legislation “to prevent cuts that will do catastrophic damage to our men and women inuniform and our national security.”

Defense Secretary Leon E. Panetta has said the cuts would result in “the smallest ground force since 1940, the smallest number of ships since 1915 and the smallest Air Force in its history.” He also raised the specter of deep cuts to America’s nuclear arsenal.

Independent analysts of the military budget said that the situation was not as dire as Mr....