U.S. President Barack Obama is meeting with congressional leaders of both parties Saturday after a top Republican broke off negotiations on raising the country's borrowing limit.

Mr. Obama said during his Saturday weekly address that he wants the lawmakers to explain to him how the country will avoid defaulting on its payments after the government runs out of money on August 2. He said both sides must compromise or they will never get anything done.

Speaker of the House of Representatives John Boehner said Friday that President Obama's proposal had demanded an unacceptable increase in tax revenue that would require raising taxes on the people needed to invest in the economy and create jobs. Boehner said he remains confident the U.S. can avoid defaulting on its payments.

Mr. Obama said he was offering what he called “an extraordinarily fair deal.”

The president said he had proposed significant cuts in discretionary spending and from social welfare programs. He said he also had proposed increasing tax revenue by a lower amount than had been agreed to by a bipartisan group of senators.

In the Republican Party's weekly address Saturday, Representative Jeb Hensarling said if the country is going to avoid default, President Obama and his allies need to work with Republicans to “cut up the credit cards once and for all.”

Mr. Obama said he is willing to go along with a back-up plan proposed by the top Republican in the Senate, Mitch McConnell, that would give Mr. Obama the power to raise the debt limit while allowing Republicans to vote against the increase. He said this would accomplish the minimum necessary of allowing the U.S. to keep paying its bills. But he said he preferred to also work on solving the problem of the enormous U.S. debt and deficit.

The U.S. Treasury Department, the central bank and the White House have all warned a default would have catastrophic consequences for the economy. Economists have also said default would have a very negative effect on the global economy.