US '10 days from debt disaster'
Barack Obama has told top politicians they must hammer out a deal within the next 10 days to avoid an unprecedented default on US debt.
Mr Obama and the eight top House of Representatives and Senate leaders assembled in the White House Cabinet Room for about 90 minutes during a rare late-night Sunday session, less than 24 hours after House speaker John Boehner abandoned plans to negotiate a massive four trillion-dollar (£2.5 trillion) deal for reducing the debt. The group will meet again on Monday.
As the meeting opened, Mr Obama and the leaders sat around the table in casual dress. Asked whether the White House and Congress could "work it out in 10 days", Mr Obama replied: "We need to."
The Obama administration has warned that refusal by Congress to raise the 14.3 trillion-dollar (£8.9 trillion) debt limit could lead to the first time in history when the US government cannot pay its debts.
The International Monetary Fund's new chief, Christine Lagarde, said that if the US failed to act, she foresaw "interest hikes, stock markets taking a huge hit and real nasty consequences" for the American and global economies.
"I would hope that there is enough bipartisan intelligence and understanding of the challenge that is ahead of the United States, but also the rest of the world," she said.
Republicans have demanded that any plan to raise the debt limit be coupled with massive spending cuts to lighten the burden of government on the struggling economy. Higher taxes, Republicans have said from the start, are deal-killers if not offset elsewhere.
But Mr Obama has a long way to go to satisfy politicians in his own party too. Many Democrats are unnerved by the president's four-trillion proposal because of its changes to Medicare and Medicaid.
Despite Mr Boehner's preference for a smaller, two trillion-dollar (£1.25 trillion) plan for deficit reduction, White House aides said Mr Obama would press politicians to accept the larger deal.
Republicans object to its substantial tax increases and Democrats dislike its cuts to programmes for the elderly and the poor. The aides, however, left room for negotiations on a more modest approach.