U.S. President Barack Obama will resume discussions on Monday with Congressional leaders at the White House to hash out a crucial deficit-reduction package.

Sunday's high-stakes talks ended after less than 90 minutes, with the aim to reach a consensus before an Aug. 2 deadline, by which point the U.S. risks defaulting on its debt. The talks will continue on Monday, according to a White House aide.

Obama plans to hold a press conference on Monday, and the group of eight lawmakers in the bipartisan group will meet every day until a deal is reached at the White House, officials said.

The negotiations come as U.S. Treasury Secretary Timothy Geithner warned Sunday that a failure by Democrats and Republicans to reach a deal on raising the country's debt ceiling will bring "catastrophic consequences" for the country's economy.

"This week, and certainly by the end of next week, we have to have agreement on the outlines of a package," Geithner said on CBS's Face the Nation. "Failure is not an option."

$4-trillion deal shot down

The debt ceiling is the amount of money the government can borrow to help finance its operations. The U.S. has reached its limit because the federal government has grown accustomed to borrowing massive amounts of money. The latest estimate is that it borrows 40 cents for every dollar it spends.

Unless both parties reach a deal by Aug. 2, the U.S. government would technically be in default of its loans as of that day.

A default would throw financial markets into turmoil, raise U.S. interest rates and devastate the economic recovery.

On Saturday, U.S. House Republican budget negotiators abandoned plans to pursue a massive $4 trillion, 10-year deficit reduction package in the face of stiff GOP opposition to any plan that would increase taxes as part of the deal.

John Boehner, the Republican Speaker of the House, informed U.S. President Barack Obama Saturday that a smaller agreement of about $2 trillion was more realistic.

However, Geithner said he still wants the biggest deal possible, not a short-term pact. White House Chief of Staff Bill Daley said Obama wants a deal of at least $4 trillion.

In another interview, Geithner told NBCs' Meet the Press that reaching a deal requires compromise on both sides.

Further debt talks including Obama and congressional leaders are set for Sunday evening.

With files from The Associated Press