A special debt-reduction committee in the U.S. Congress failed to reach agreement, which is extending partisan gridlock into the 2012 election year and setting the stage for $1.2 trillion in automatic spending cuts.

”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,” said panel co-chariman Representative Jeb Hensarling of Texas and Senator Patty Murray of Washington, in an e-mailed statement.

The two said that they ”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.”

Standard & Poor’s said it would keep the U.S. government’s credit rating of AA+ after the super-committee’s announcement. S&P, which stripped the U.S. of its top AAA grade on Aug. 5, has said that it decided the failure didn’t merit another downgrade.

The official announcement of complete failure by the super-committee came after member spent the day shuttling between meetings to try to reach a last-ditch accord on at least $1.2 trillion in cuts. The super-committee was meant to end an impasse in Washington after all of the talks over the past year aimed at reducing the deficit collapsed amid partisan wrangling.

Both of the parties have blamed each other for the stalemate, with the Democrats saying that the Republicans accusing Democrats of rejecting an offer to help raise revenue along with spending cuts.

Treasuries rallied while the riskier assets declined as the congressional super-committee’s deadlock spurred demand for safer assets.

At 4 p.m. in New York, the Standard & Poor’s 500 Index lost 1.9 percent to close at a six-week low of 1,192.98. The MSCI All-Country World Index fell 2.3 percent in its first six-day slump since August. Yields on 10-year Treasury notes fell four basis points to 1.97 percent.

”While I am disappointed, the House will forge ahead with the commitments we have made to reducing government spending and removing barriers standing in the way of private-sector job creation,” said the House Speaker John Boehner in a statement. ”Doing otherwise is not an option.”

In a statement, Senate Republic Leader Mitch McConnell said that the Democrats rejected two ”good-faith” Republic proposals.

”We’ll continue our efforts to reduce the size of Washington, reform and protect the entitlement system for future generations, and create a better environment for job growth,” he said.

In a statement Senate Majority Leader Harry Reid said that ”Republicans relentlessly sought to end Medicare as we know it by privatizing the program and putting seniors and future generations at the mercy of insurance companies.”