The White House and top US lawmakers hurriedly hunted on Sunday for a deal to stop the world's richest country from a ruinous default on its debt just hours before Asian markets were to open.
US House Speaker John Boehner told fellow Republicans privately Sunday there was still no breakthrough in fractious talks to avert an unthinkable default, two sources said.
Republicans and Democrats gave little sign of progress towards a compromise to raise the $US14.3 trillion ($A13.2 trillion) limit on borrowing by the US government, which will run out of cash to pay its bills August 2.
On a conference call with his majority, Boehner stressed that "no one is willing to default" and warned that Republicans may face "sacrifices" in a deal to enable the country to pay its bills past an August 2 deadline, the sources said.
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The speaker told House Republicans he would have more details Monday on a new approach and stressed "we're doing the right thing, you all know the right thing isn't always the easiest thing to do," said one of the sources.
His comments came as Democratic Senate Majority Leader Harry Reid and Democratic House Minority Leader Nancy Pelosi were due at the White House to discuss with President Barack Obama a rival plan for averting default while closing the yawning US budget deficit.
Boehner appealed for unity from often restive House Republicans, who passed a measure last week tying a debt ceiling increase to steep spending cuts, a cap on federal outlays as a percentage of the economy and a balanced budget.
He noted the Democratic-held Senate had killed the Republican plan and urged his troops to focus on "what can we pass that will protect our country" from Obama's policies, both sources said.
"There is a path. But it's going to require us to stand together as a team. It's going to require some of you to make some sacrifices. If we stand together as a team, our leverage is maximized, and they have to deal with us," Boehner said.
The speaker had previously said he aimed to unveil legislation early this week in a bid to secure a vote by mid-week to raise the $14.3 trillion US debt limit.
OBAMA: STRESSFUL DAYS
"We may have a few stressful days coming up, and stressful for the markets of the world and the American people," US President Barack Obama's chief of staff, William Daley, told CBS television as the stalemate dragged on.
"But in the end there's no question in my mind the government of America will not default," he said, as Britain warned "right-wing nutters" in the US Congress posed a worse threat to the world economy than Europe's own financial crisis.
All sides agree cash-strapped Washington must close its yawning budget deficit but disagreed on the size and blend of spending cuts and revenue increases as well as on how and whether to slice into
the social safety net.
US Treasury Secretary Timothy Geithner said a default would be "unthinkable" and warned against a short-term debt ceiling hike that could force another standoff in the middle of the 2012 election campaign.
Obama is seeking a second term in a contest defined by his handling of the ailing US economy and shaped by Republican anger at government spending.
Washington hit its debt ceiling on May 16 but has used spending and accounting adjustments, as well as higher-than-expected tax receipts, to continue operating normally so far.
Finance and business leaders have warned failure to raise the US debt ceiling by August 2 would send shockwaves through the world economy, while Obama has predicted a default would trigger economic "Armageddon."
Republicans, notably newly elected members close to the archconservative "Tea Party" movement, have rejected Obama's call for tax hikes on the rich and wealthy corporations, a key bone of contention in the discussions.
British Business Secretary Vince Cable, a Liberal Democrat and one of the most outspoken members of Britain's coalition government, blamed the conservative rightwing for the stalemate.
"The irony of the situation at the moment, with markets opening tomorrow morning, is that the biggest threat to the world financial system comes from a few right-wing nutters in the American Congress
rather than the eurozone," Cable told the BBC.
Republicans have called for spending cuts over 10 years at least equal to the dollar amount of any debt limit increase.
Democrats have pledged to defend cherished social safety net programs, which the president has targeted for cuts.
The treasury chief said under one plan, a committee with exceptional powers would be set up in the coming months to put together a framework of tough reforms to the US economy with a clear deadline for moving forward.
The United States has "to demonstrate to the world that we can get our fiscal house in order," Geithner told Fox News Sunday.
