US President Barack Obama has warned that failure to act on deficits and debt could cost jobs and do serious damage to the American economy.
The United States will run out of ability to borrow money and pay its existing bills after 2 August if an agreement is not reached by then to extend the nation's $US14.3 trillion debt limit.
In a televised address on Monday, Mr Obama said the country was growing dangerously close to default and both Democrats and Republicans have a responsibility to tackle the challenge and fix it.
The president said the only ones standing in the way of a balanced compromise to the debt crisis were those Republicans in Congress who were insisting only on spending cuts, the BBC reports. Mr Obama called for an approach that would raise taxes on wealthy Americans.
He warned that the possible consequences of America's first ever default, including rising interest rates that would hurt everyone.
The president said he would not allow the American people to become the collateral damage in Washington's political warfare.
Republican leader John Boehner, who is Speaker of the House, also made a televised address, and blamed Mr Obama for the stalemate.
He blamed Mr Obama - not for the first time - of moving the goal posts during recent negotiations and of creating an atmosphere of crisis.
"I made a sincere effort to work with the president and I gave it my all. Unfortunately the president would not take yes for an answer. Even when we thought we might be close to an agreement, the president's demands changed."
He accused Mr Obama of wanting a blank cheque to impose new taxes.
Democrats and Republicans have unveiled competing plans to cut the deficit and raise the debt limit to avoid a default.
The House Republicans' proposal would trim $1.2 trillion - but also cut programmes for the poor and elderly popular among Democrats.
The Senate Democrats' plan would trim $US2.7 trillion over a decade. The BBC reports neither plan would raise new revenue.