Obama and Boehner speak out as US debt divisions endure
Democrats and Republicans have unveiled competing plans to avoid a default, as the president and the House speaker prepared to address the nation.
Despite weeks of negotiations, the two parties remain at odds over the size of spending cuts and tax increases.
Amid the impasse, President Barack Obama and House Speaker John Boehner were appearing on TV on Monday night.
The US risks default on its $14.3tn (£8.7tn) debt without a deal to raise the borrowing limit by 2 August.
At the White House, Mr Obama began a live television address on the debt issue at 21:00 local time (01:00 GMT).
"President Obama, like Democratic and Republican Presidents before him, will make clear that failure to compromise and raise the debt ceiling would, in the words of former President Reagan, do 'incalculable damage'," a White House official said.
Mr Boehner is to speak shortly after his address.
The president and Republican and Democratic leaders of the House and Senate have been negotiating for weeks over legislation to raise the debt ceiling and cut the nation's budget deficit.
The talks have broken down several times. In order to become law, any plan would require agreement from disparate factions within both parties and to pass both chambers of Congress.
In Monday's latest round of bargaining, Senate Democrats introduced a plan that would trim $2.7tn (£1.66tn) over a decade.
The plan would protect social programmes for the poor and elderly and a public pension programme - all popular among Democrats. It would not raise new tax revenue.
"This is an offer that Republicans can't refuse," Senate Democratic Whip Charles Schumer of New York told reporters about the Democrats' plan.
Republicans had agreed to all those cuts at one point or another during the protracted budget and debt limit negotiations, he said.
"If they refuse this offer it simply means they want a default."
That plan would increase the US debt limit enough to give the government borrowing authority through 2012.
The Senate Democrats' plan won immediate endorsement from the White House, which called it "a reasonable approach that should receive the support of both parties."
Later on Monday, House Republicans unveiled their own plan that included $1.2tn (£736tn) in cuts, caps on future spending, and offered a $1tn debt ceiling increase - not enough to last through the 2012 election.
The Republican plan would require a second debt limit during 2012.
That rise would be dependent on Congress approving cuts in the health programmes for the poor and elderly, and would not include new revenues.
President Obama has repeatedly said that wealthy Americans and businesses should contribute to reducing the deficit through some new taxes.
At Monday's news conference, Mr Boehner, a Republican, criticised the Senate Democrats' plan, saying it was founded on accounting gimmicks and "doesn't deal with" healthcare programmes for the poor and elderly, "which he called the biggest drivers of our debt and our deficit".
In a sign of the growing urgency and concern in global financial markets, the International Monetary Fund (IMF) on Monday called on the US government to act urgently to raise the debt ceiling and for a "comprehensive solution" to reduce the US deficit over the medium term.
Without this, IMF directors warned, the markets could lose confidence in Washington's ability to pay its debts.
"These risks would also have significant global repercussions, given the central role of US Treasury bonds in world financial markets," the IMF said.
It went on to call for specific actions to reduce spending saying: "The strategy should include entitlement reforms, including additional savings in healthcare, as well as revenue increases."
But, warning that US growth was likely to remain subdued over the medium term, the IMF advised against fast cuts which could impact on consumer spending.
Global markets down
President Obama meanwhile pulled out of two fundraising events in Washington scheduled for Monday evening so that he could focus on the debt issue.
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He told a Hispanic civil rights convention earlier in the day that the US could not solve its budget problem solely by reducing spending, in a riposte to Republicans who have vigorously opposed raising taxes.
"We can't just close our deficit by cutting spending," Mr Obama said, adding that revenue increases were also necessary.
Global markets were down slightly on Monday amid concerns about a lack of a deal as the 2 August deadline looms.
If the ceiling is not raised, the US Treasury could run out of money to pay all of its bills - which could lead to interest rate rises, threaten the US economy and in turn the global recovery.
The US federal government is running a large budget deficit - equal to $1.3tn, or more than $4,000 per person, during the 12 months to June this year.
Mr Obama and fellow Democrats have been seeking a deal with Republicans, who control the House of Representatives, to cut the annual budget deficit in return for a rise in the total debt ceiling.