Updated from 5:33 p.m. ET with comments from President Obama

NEW YORK (

TheStreet

) -- The special Joint Select Committee on Deficit Reduction failed to reach a compromise on Monday for more than $1 trillion in bipartisan cuts to the United States' federal budget.

"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,"

the committee said

in a statement.

News of the impending failure

rattled U.S. markets as the

Dow Jones Industrial Average

slumped to 11,547 points, down 249, or 2.1% and as the

Nasdaq

slid to 2523, down 49 points, or 1.9%.

"To their credit many Democrats in Congress were willing to put their politics aside," President Barack Obama said Monday. He said, though, that there were still too many Republicans in Congress who refused to listen to the voice of compromise.

The "super committee" was charged with issuing a formal recommendation to Congress on how to reduce the federal deficit by at least $1.5 trillion over the next 10 years, according to the

committee's Web site.

"We are deeply disappointed that we have been unable to come to a bipartisan deficit reduction agreement, but as we approach the uniquely American holiday of Thanksgiving, we want to express our appreciation to every member of this committee, each of whom came into the process committed to achieving a solution that has eluded many groups before us.

"Most importantly, we want to thank the American people for sharing thoughts and ideas and for providing support and good will as we worked to accomplish this difficult task," the committee said.

The failure triggers $1.2 trillion in

automatic spending cuts that will go into effect in 2013 and be evenly split between defense and non-defense spending.

"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 committee statement said.

"We are not in the same situation that we were in in August," Obama said. "There are already $1 trillion of federal spending cuts that are already locked in."

-- Written by Joe Deaux in New York

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