Likely Fallout From Deficit-reduction Panel Failure

Nov 20 (Reuters) - The failure of a congressional deficit-cutting "super committee" means the tough work of putting the United States' finances on a stable path will likely have to wait until 2013 at the earliest. Barring some unforeseen development, the Republican and Democratic co-chairs of the committee are due to issue a joint statement on Monday conceding defeat in their three-month search for  debt deal, aides told Reuters on Sunday.

With the intensifying 2012 election campaign stoking already bitter partisanship in Washington, the U.S. Congress will be hard-pressed to reform expensive government benefit programs and an archaic tax code that are seen as the keys to improving the country's fiscal health. Given the complexity of passing such legislation through Congress, it could even be 2014 before real progress is made. That timetable could test the patience of global financial markets that so far have been willing to continue investing heavily in the United States as Europe grapples with a spiraling debt crisis.

The super committee has squandered a rare opportunity to take major action against the United States' fiscal problems because it had extraordinary powers to quickly move legislation through a gridlocked Congress. The likely fallout from the committee's inability to agree on at least $1.2 trillion in deficit-reduction over 10 years also includes:

One thing is certain: The super committee will disband having not agreed on one penny of deficit-reduction. Instead, it will have actually contributed to the government's $1 trillion-a-year budget deficits, having spent government funds paying for staff and other expenses.