President Obama holds emergency meeting with congressional leaders

US President Barack Obama has held an emergency meeting with congressional leaders in a last-ditch bid to avert an economically catastrophic debt default.



Obama called the meeting after talks with Republican House Speaker John Boehner broke down yesterday.



Both Democrats and Republicans are divided on how to control future spending.



Congress must approve a plan to raise America's debt ceiling before the August 2 default deadline.



If the US fails to meet the deadline to raise the $14.3 trillion limit on US borrowing, the Treasury could run out of money to pay its bills - which could lead to interest rate rises, the US economic recovery threatened and in turn the global recovery.



Both McConnell and Boehner have issued statements saying they intend to find a bipartisan solution to significantly reduce Washington spending and preserve the full faith and credit of the United States.