US President Barack Obama has blamed conservative Republicans in the House of Representatives for the lack of a deal to avoid a US national default.
At the White House, Mr Obama said the steep budget cuts Republicans insisted on as the price of an increase in the debt limit would do economic harm.He called for an approach that would raise taxes on wealthy Americans.
The US risks default on its $14.3tn (£8.7tn) debt without a deal to raise the borrowing limit by 2 August.
"Republican House members have essentially said that the only way they'll vote to prevent America's first-ever default is if the rest of us agree to their deep, spending cuts-only approach," Mr Obama said in a nationally-televised address.
The US government runs an annual budget deficit that topped $1.5tr (£920bn) this year, and has amassed a national debt of $14.3tn.
'Balanced approach' Votes to raise the US debt limit have historically been a matter of routine in the US Congress, but this year, Republicans - buoyed by a newly elected crop of fiscal conservatives - have refused to agree to a debt increase without significant reductions in the budget deficit.
In the negotiations, the chief sticking points are Republican resistence to raising new tax revenue and Democrats' desire to protect social programmes for the poor and elderly and a public pension scheme.
On Monday night, Mr Obama said he and Republican House Speaker John Boehner, who made a rebuttal address shortly after Mr Obama, had worked in recent weeks to craft an agreement.
That deal would have trimmed $4tn (£2.5tn) from the deficit over ten years, in a mixture of spending cuts and tax increases on the wealthy and on corporations, Mr Obama's.
But he was sharply critical of Republican members of the House of Representatives, many of whom are strongly resisting any package that includes tax rises."The only reason this balanced approach isn't on its way to becoming law right now is because a significant number of Republicans in Congress are insisting on a cuts-only approach," Mr Obama said.
That approach, he added "doesn't ask the wealthiest Americans or biggest corporations to contribute anything at all."
He said: "Most Americans, regardless of political party, don't understand how we can ask a senior citizen to pay more for her Medicare before we ask corporate jet owners and oil companies to give up tax breaks that other companies don't get."
Concern over jobs Responding to the president immediately after his speech, Mr Boehner said Mr Obama had requested a "blank cheque", and insisted the US government's "spending binge" was over.
"The president has often said we need a 'balanced' approach - which in Washington means: we spend more... you pay more. Having run a small business, I know those tax increases will destroy jobs."
Mr Boehner agreed the US "cannot default on its debt obligations", but showed no indication he or his Republican caucus were willing to compromise on tax increases.
And he called on Democrats to approve House Republican proposals.
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.
House Republicans, meanwhile, 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.
In his White House address later, Mr Obama firmly rejected the Republican plan, in part because it would require another round of debt limit wrangling in six months.
"We know what we have to do to reduce our deficits," he said. "There's no point in putting the economy at risk by kicking the can further down the road."
He endorsed the Senate Democrats' plan as "a much better path", though one that would fall short of his goals to reform the tax system and social programmes.
If the debt 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.
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