U.S. President Barack Obama and opposition Republican lawmakers remained deadlocked Tuesday on plans to raise the nation's debt limit as a possible default looms a week away.

The White House said Tuesday the president is “doing whatever he could” to reach a compromise on increasing the country's $14.3 trillion borrowing limit ahead of the August 2 deadline, when officials say the U.S. will no longer have enough money to pay all of its bills. White House spokesman Jay Carney said “compromise is the only option” because the effect of a possible default on the world economy is “cataclysmic for all to consider.”

Republicans in the House of Representatives set a Wednesday vote on a deficit-reduction plan that Mr. Obama opposes. House Speaker John Boehner wants a two-step plan that would immediately raise the borrowing limit by $1 trillion and possibly by another $1.5 trillion next year, while the government cuts spending by $3 trillion over the next decade.

The House Republican leader called it a “reasonable…responsible” proposal that can win congressional approval.

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Mr. Obama, a Democrat, favors a plan being pushed by the Senate majority leader, Democrat Harry Reid, that calls for a $2.7 trillion increase in the debt ceiling. That would give the government enough money to cover its bills through 2012, and put off another debt ceiling debate until after the presidential and congressional elections 16 months from now. Reid called the Republican plan “a short-term fix” that cannot pass the Democratic-controlled Senate.

Washignton's unsettled debate about the debt ceiling pushed the price of gold, considered a safe investment in times of financial uncertainty, to a record high this week. An ounce of the precious metal was selling for more than $1,613 an ounce on Tuesday, just below Monday's all-time high. Meanwhile, the dollar depreciated against 16 major world currencies it is measured against.

Mr. Obama said Monday night in a televised address that Congress risks sparking a “deep economic crisis” if lawmakers fail to reach a compromise on the debt ceiling within the next week. Just hours before, Boehner and Reid unveiled their rival plans for cutting spending and increasing the borrowing limit.

If there is no plan to let the federal government keep borrowing funds by August 2, the country risks defaulting on its debt. The Treasury says it could not pay all of its obligations, and interest rates would rise for anyone seeking loans from U.S. banks. The government also may not be able to meet such obligations as Social Security checks to retirees and to fulfill corporate contracts.