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The U.S. government is expected to hit the dreaded $14.294 trillion borrowing limit Monday, marking the beginning of an 11-week political effort to avoid a default.

In a CBS News broadcast Sunday, President Barack Obama warned of the unwanted outcomes a default would cause.

"If investors around the world thought that the full faith and credit of the United States was not being backed up, if they thought that we might renege on our IOUs, it could unravel the entire financial system," Obama said at the CBS News town-hall meeting.

The president said a default could lead to a worse economic recession and financial crisis than in 2008-2009. He also said Congress needs to raise the debt limit in order to avoid such a situation.

Even though Republican leaders agree that the limit must be raised they said they will not approve a further increase in borrowing unless steps are taken to keep debt under control.

The Treasury Department says it can draw on other sources to pay the U.S. bills and delay default until August 2.

The Wall Street Journal reported that the Treasury Department would announce plans on Monday to stop issuing and reinvesting government securities in certain government pension plans.

The Treasury's moves buy time for the White House and congressional leaders to reach a deficit-reduction agreement that could clear the way for enough lawmakers to vote to raise the amount of money Congress allows the nation to borrow.

Gene Sperling, director of the National Economic Council, said reaching the debt ceiling "should be a warning bell to the political system that it's time to get serious about preserving our full faith and credit."

But the pathway to a deal remains unclear, even to those doing the negotiating. The White House and Republicans are giving conflicting signals about how close they are to a deal. Vice President Joe Biden said last week the contours of an agreement were taking shape. House Speaker John Boehner painted a different picture Sunday, saying on CBS's Face the Nation "I'm not seeing any real action."

According to The Washington Post, many congressional Republicans are skeptical that missing the Aug. 2 deadline would affect the economy as much as the president and Treasury Department have suggested.

What’s more, Republican leaders are insisting that Congress cut spending by as much as the Obama administration wants to raise the debt limit, without any new taxes. Obama is proposing spending cuts and tax increases to rein in the debt.

“Everything should be on the table, except raising taxes,” House Speaker John Boehner (R-Ohio) said on CBS’s “Face the Nation.” “Because raising taxes will hurt our economy and hurt our ability to create jobs in our country.”

The Obama administration has said the debt limit should not be linked to other proposals. But Boehner refuses to vote for a debt ceiling increase unless government spending is brought down.

Other Republicans have said there are other ways the Treasury could raise money to avoid defaulting, such as selling investments in private companies.

Reach Frances Vega here.