Barack Obama has reluctantly ordered huge spending cuts after failing to reach an agreement with his Republican opponents.
The US President could not reach a compromise that would have blocked the $85 billion (£56bn) move.
Both sides blamed each other, as Obama warned that "dumb, arbitrary cuts" were now on their way.
The cuts are designed to whittle away at America's enormous debt, but could threaten its still-weak economy.
Both Obama and the Republican leaders in the House of Representatives and Senate declared themselves still deadlocked after an 11th-hour White House meeting late on Friday.
The two sides are at odds over the president's insistence on increasing taxes as part of any plan for attacking the country's $16.6 trillion (£11tn) debt.
The cuts, known as the sequester, were drawn up in 2011 and designed to be so severe that politicians would be forced to agree to an alternative path.
But they have failed to reach agreement on the way forward so Obama has signed an order putting them into motion.
Speaking after the White House meeting, the President blamed Republicans for the talks' failure.
After the White House talks broke up, Mr Obama blamed Republicans for the impasse.
"As long as the sequester is in place, we'll know that that economic news could have been better if Congress had not failed to act," he said.
"And let's be clear, none of this is necessary. It's happening because of a choice that Republicans in Congress have made."
"They've allowed these cuts to happen, because they refused to budge on closing a single wasteful loophole to help reduce the deficit," he said.
"As recently as yesterday they decided to protect special interest tax breaks for the well-off and the well-connected, and they think that that's apparently more important than protecting our military or middle class families from the pain of these cuts."