Time is running out to come up with a deal to raise the debt limit, US president Barack Obama has warned lawmakers.
'We are obviously running out of time and so what I have said to members of Congress is that you need over the next 24 to 36 hours to give me some sense of what your plan is to get the debt ceiling raised,' he told a news conference.
Obama said he would not support a $2.4 trillion plan to reduce the federal deficit without some tax hikes to increase revenues.
'I have not seen a credible plan, having gone through the numbers, that would allow us to get to $2.4 trillion without really hurting ordinary folks,' he said.
'The notion that we would be doing that and not asking anything from the wealthiest among us, or not closing corporate loopholes, that doesn't seem like a serious plan.'
Obama stressed that the US fiscal problems were not as bad as those threatening the stability of the euro zone, saying fixing the deficit does not require 'anything radical'.
'Contrary to what some folks say, we're not Greece. We're not Portugal.'
Obama said that deficit negotiations should have been taken care of earlier rather than allowed to run this close to the 2 August deadline for raising the US debt ceiling.
He said that failing to raise the debt limit would effectively amount to a tax increase for all Americans.
He urged Republicans to work with him to reach a compromise on trade adjustment assistance that would pave the way for trade deals with Colombia, South Korea and Panama.
‘I've got three trade deals sitting ready to go and these are all trade deals Republicans said were their top priorities,’ he said.
Separately, US House Democratic Leader Nancy Pelosi said she hoped talks between Obama and congressional leaders on raising the $14.3 trillion US debt limit will result in a large deficit reduction plan.
'We support our president for the grand bargain,' Pelosi said at a news conference. 'We hope that can still happen.'
She said Democrats would not support cuts to the Medicare health plan and Social Security retirement benefits to reduce deficits but would consider changes to strengthen those programs.
Earlier, Republican members of the House, which include conservative members who are adamantly opposed to raising the debt ceiling, met for more than 90 minutes.
They agreed to vote next week on a 'cut, cap and balance' proposal that would require steep discretionary cuts in the coming fiscal year, cap spending as a percentage of gross domestic product and amend the US Constitution to require a balanced budget.
Republican leaders said it would pass the House, but it will not likely clear the Democratic-led Senate.
Stand & Poor's issues US rating warning
Credit rating agency Standard & Poor's has said the risk that the United States will lose its AAA credit rating in the next three months has risen considerably.
An S&P official told Reuters this could happen even if politicians reached an agreement to raise the country's debt ceiling later this month.
John Chambers, chairman of Standard & Poor's sovereign ratings committee, said 'this is the time' for the White House and Republicans to reach a credible budget agreement to tackle the country's long-term debt problems.
'If you get a small agreement, that will lead to a downgrade,' Chambers warned.
In April, S&P revised its outlook on US credit ratings to negative, which traditionally signals a downgrade in 12-18 months.
But 'that horizon has shortened', Chambers said, because it is very unlikely that Washington will be able to craft a meaningful budget agreement next year if it misses the chance now.
S&P is the only one of the big three agencies with a negative outlook on US ratings. Moody's on Wednesday placed US ratings on review for a possible downgrade to account for the risk - which it considers low but growing - that the US Treasury will miss debt payments in August if the debt ceiling is not raised.
S&P yesterday also placed US ratings on creditwatch, similar to a review for downgrade, because it also sees a growing risk of a ceiling-related technical default in August.
