Crucial talks on US debt have collapsed again. America will run out of money on 2 August, if its debt ceiling is not raised, causing a potentially catastrophic default.
US President Barack Obama has summoned top lawmakers to a meeting on Saturday to try to salvage a deal on the government's borrowing limit from the wreckage of deficit talks.
The world's largest economy is edging closer to a catastrophic default.
With the US Treasury set to run out of money to pay all of its bills on 2 August, Obama said the window may have closed for a "grand bargain" of spending cuts and tax increases in exchange for Congress raising the $14.3 trillion debt ceiling.
Credit rating agencies also want spending restraints for the United States to keep its prized AAA rating that makes US Treasuries the solid foundation for global investors and lowers borrowing costs for state governments, businesses, homeowners and consumers.
"We have now run out of time," Obama said on Friday after John Boehner, the top Republican in Congress, broke off talks on a deficit reduction package worth more than $3 trillion over 10 years.
Financial markets are growing more edgy and US banks and businesses are making contingency plans for the possibility of a debt default that would drive up interest rates, sink the dollar and ripple through economies around the world.
Obama, a Democrat, called Boehner and other congressional leaders to a meeting at 15.00 at the White House on how the debt ceiling can be raised by 2 August.
"They are going to have to explain to me how it is that we are going to avoid default," Obama said.
Boehner, the speaker of the House of Representatives, said he would attend. Senate Republican leader Mitch McConnell, Senate Democratic leader Harry Reid and Nancy Pelosi, the top Democrat in the House, were also summoned.
Boehner said he was confident the debt ceiling would be raised next week.
But he will have to overcome resistance from Tea Party conservatives in his own party and could run into problems for having signalled a willingness to give ground on revenue increases in closed-door talks at the White House.