The United States edged closer today to a devastating default as President Barack Obama’s Democrats and their Republican rivals remained deadlocked over competing plans to raise the debt ceiling, one week before a deadline to act, Reuters reported.

With no compromise in sight and the threat of a U.S. credit downgrade looming, International Monetary Fund chief Christine Lagarde urged swift resolution of the political impasse among lawmakers, warning that failure to reach an agreement would have serious consequences for the world economy.

Obama, in a televised address late Monday aimed at rallying public support for a package proposed by Senate Democrats, said failure to increase the borrowing limit would severely hurt the nation.

“I have told leaders of both parties that they must come up with a fair compromise in the next few days that can pass both houses of Congress – a compromise I can sign,” he said. “And I am confident we can reach this compromise.”

Republican House Speaker John Boehner, moments after Obama’s speech, countered by saying the president wants a blank check to continue spending that is “sapping the drive of our people.”

Republicans and Democrats both insist they will not allow the country to default.