President Barack Obama has warned Americans that failure to reach a compromise with Congress on raising the nation's debt ceiling will do incalculable damage to the United States.

In a televised address to the nation Monday night, Mr. Obama said there will be dire consequences if the U.S. defaults on its debt. He said that while neither political party is blameless in the debt crisis, both have a responsibility to resolve it.

The president invoked the words of the late Republican President Ronald Reagan by saying there must be a “balanced approach” to dealing with the crisis – one that includes both cuts in entitlement programs and tax reform.

Earlier in the day, Republican and Democratic leaders put forth competing plans to resolve the high stakes fight over cutting the government deficit and increasing the U.S. borrowing limit. No compromise is in sight, with time running out to avoid a potentially catastrophic default.

For his part, President Obama sided with a plan from Senate Majority Leader Harry Reid that would include $2.7 trillion in cuts and would raise the debt ceiling through next year's general election.

On the other side, Republican House Speaker John Boehner offered a plan that would raise the borrowing limit by $1 trillion through the end of this year and would permit a larger increase next year. It would require Congress to cut benefit programs that Democrats support.

Mr. Obama's speech was being closely watched by Asian markets as they opened.