US President Barack Obama has cited "some progress" in debt talks, with the US at the "11th hour" before a deadline to raise the nation's debt ceiling.
At the White House, Mr Obama hailed a plan by a group of senators to cut the budget deficit and raise the limit.
Meanwhile, the House passed legislation calling for drastic spending cuts in return for raising the debt ceiling.
The US risks default on its debt if Congress does not raise the borrowing limit before 2 August.
Mr Obama said a proposal had been put forward on Tuesday by a bipartisan "gang of six" senators.
'Talking turkey'
The group has been meeting on and off in recent months in an effort to craft a plan to reduce the US government's $1.5tn (£930bn) annual budget deficit.
Mr Obama said the proposal was "consistent" with a plan the White House had been urging, and called on leaders in the House and Senate from both parties to start "talking turkey".
"We don't have any more time to engage in symbolic gestures. We don't have any more time to posture," Mr Obama said. "It's time to get down to the business of actually solving this problem."
The plan was reported to include a mix of new revenues and cuts to military and social spending that in total would cut the budget deficit by about $3.7tn over the next 10 years.
Mr Obama said in particular that the plan would broadly share the "sacrifice" across the political spectrum, with both Democrats and Republicans ceding on some of their policy priorities.
House Republican Leader Eric Cantor also said on Tuesday that the plan contained some good ideas but did not do enough.
"The plan fails to significantly address the largest drivers of America's debt, and it is unclear how the goals of tax and entitlement reforms would be enforced," he said in a statement.
'Cut, cap, balance'
There have been sticking points on both sides of the political divide in recent months.
Republicans have been unwilling to consider raising new tax revenues to counter the growing budget deficits, while the Democrats have been opposed to cutting popular healthcare and welfare programmes for pensioners and the poor.
On Tuesday evening, the Republican-controlled House of Representatives passed a so-called "cut, cap and balance" plan - which conservative Tea Party members backed - by a vote of 234-190.
It would impose severe and immediate spending cuts, cap future government spending at a certain percentage of the national economy, and call for an amendment to the US constitution to require Congress to pass a balanced budget.
But analysts say the bill has no chance of passing the Senate, which the Democrats narrowly control.
President Obama has said he would veto the legislation if it were eventually passed.
Republican House Speaker John Boehner said he was working on a second plan to stave off a financial collapse.
"I'm not going to give up hope on cut, cap and balance, but I do think it's responsible for us to look at what Plan B would look like," Mr Boehner said.
Mr Obama also touted a "fail-safe" plan being put together by Republican Senate Minority Leader Mitch McConnell and Democratic Senate Majority Leader Harry Reid, one which would allow the president to raise the debt ceiling with just Democratic votes.
