President Barack Obama called Democratic and Republican leaders back to the White House on Wednesday for bottom-line negotiations on how to prevent a disastrous government default – and cut staggering federal deficits as well.

The White House said for the first time that Mr Obama would accept a short-term extension of the debt limit, but only if a broader deal was already in place and required more time – perhaps a few days – to get through Congress.

The question for the President now is what will it take to get enough votes from both parties to muscle legislation through the House and Senate and raise the national debt limit by the August 2 deadline.

The government will exhaust its ability to borrow money and pay its bills come August 2, and economists say that could sink the country back into recession.

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