Republican and Democratic leaders in the U.S. Congress have unveiled rival plans to cut government spending and raise the debt ceiling, just one week before the United States could default on its debt for the first time in history.

Speaker of the House John Boehner announced a Republican plan to immediately increase the debt ceiling by $1 trillion and cut spending by $1 trillion. This would be followed by more spending cuts next year and no tax increases.

Boehner called this a less-than-perfect but common sense approach that ensures the government does not spend more than the amount the debt limit is raised.

But the White House said President Barack Obama is endorsing a rival plan by Senate Democratic leader Harry Reid. Reid's plan includes $2.7 trillion in cuts and would raise the debt ceiling through next year's general election. It also does not call for tax increases.

A White House spokesman called it a reasonable approach.

If Congress and the president cannot agree on a plan to let the federal government continue to borrow money by August 2, the country would default on its debt. The treasury could not pay its investors and interest rates would rise for anyone seeking loans from U.S. banks.

A new International Monetary Fund report on the U.S. economy Monday said it is critical to the U.S. and other economies for Washington to promptly raise the legal limit on debt, while gradually cutting spending.