But leaders from both parties say they're confident the U.S. will not default. "We are going to get this done by Aug. 2," Obama said today.
Default by the U.S. would send ripples through the global economy and cause hardship for many Americans at home. Government checks to Social Security recipients, veterans, and federal employees could all be suspended. Interest rates would skyrocket across the board. And the stock market could plummet, hurting millions of Americans' retirement plans.
"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," International Monetary Fund managing director Christine Lagard said Sunday on "This Week."
Talks will continue this afternoon at the White House -- the third meeting since Obama became directly involved in the talks. Negotiators for both sides are expected to meet every day until a deal is reached.