US President Barack Obama on Monday urged congressional leaders from both parties to find common ground on the pending issue of increasing the debt ceiling to avert an unprecedented national default that could have devastating consequences for the economy. A deal that will be acceptable not only to the president but also to both houses of Congress would mean that Washington can continue to borrow money to pay its bills beyond August 2.

During a televised address to the nation, Mr. Obama explained the economic consequences the country will experience should a default or a downgrade of US debt by credit rating agencies occur as a result of Washington’s failure to come up with a deal that will allow the raising of the $14.3 trillion debt limit and addressing the runaway budget deficit of the country. Monday night’s speech is already Mr. Obama’s seventh televised address on primetime.

The president spoke to the people hours after both Republicans and Democrats drafted separate fallback legislation aimed to prevent government from defaulting on loans to its creditors. The president insisted that he will support a bill that will raise taxes coupled with spending cuts.

Immediately after the Mr. Obama’s speech, House Speaker John Boehner (OH-R) delivered his counter saying that Republicans tried their best to work with the White House but claimed their ideas have been constantly rejected. Boehner said, “I made a sincere effort to work with the president,” and continued “the president wanted a blank check six months ago, and he wants a blank check today. That is just not going to happen.”

Mr. Obama, meanwhile, was inclined to support fellow Democrat Senate Majority Leader Harry Reid’s plan to reduce the deficit by $2.7 trillion over the next 10 years. Obama referred to it as “a much better approach” compared to the plan by the House pushed by Boehner. Obama commented that Boehner’s plan would essentially forestall the debate for another six months and then would require another vote from the House and Senate to raise the government’s debt limit.

The longstanding deadlock over diverse plans on how to handle the country’s debt and budget deficit highlighted the ideological divide between Republicans and Democrats in Congress that has brought the country’s solid triple A credit rating at risk of being downgraded. That has sent equities and the dollar spiraling downward and in the process pushed gold prices up to a record high.

Should Congress fail to finalize a deal on the debt limit by August 2, ordinary Americans could find themselves dealing with rising interest rates and higher cost of borrowing essentially making student loans, car loans, and mortgages more expensive. A default, the first time in US history if it happens, would also mean that the federal government does not have the money to pay its obligations including social security checks, benefits of veterans, and government contracts with private businesses.