President Barack Obama met with congressional leaders last Sunday night at the White House to discuss about raising the country’s debt limit. The Treasury secretary warned that if they failed to do so, it could result to a catastrophic damage not just to the American economy but the global economy as well. The credit of the United States could be downgraded if an agreement hasn’t been made by August 2. Obama and Congressional Leaders

Treasury Secretary Timothy Geithner’s warning came hours before Obama’s meeting with members of Congress. This is the second round of negotiations. Last Saturday, House Speaker John Boehner rejected Obama’s call for a deal that would increase taxes.

The White House wants to have an agreement ready by July 22. It would be enough time to calm the financial markets as well as give the legislators enough time to approve the measure. Obama said that they need to strike a deal within 10 days.

Negotiators were optimistic that a deal will be forged soon until Boehner made his announcement. They were working on the details of a deal that would decrease the federal deficits over the next 10 years. Part of the deal is to increase the debt limit and increase taxes.