Obama says no debt deal without GOP compromise

U.S. President Barack Obama raised the stakes Monday in budget talks aimed at preventing a first-ever U.S. debt default, saying there would be no agreement if Republicans did not compromise and he would not sign a short-term agreement.

The Obama administration says there must be a deal by Aug. 2 or the U.S. will face a default on its obligations that could throw the uncertain economic recovery into greater doubt, cost millions of Americans their jobs and reverberate in financial markets around the world.

"I don't see a path to a deal if they don't budge. Period," the president said in a challenge to his political opponents, accusing Republicans of having a "my way or the highway" posture.

Asked whether he would veto legislation temporarily increasing the debt ceiling, the president said: "I will not sign a 30-day, or 60-day, or 90-day extension."

At issue in the volatile debate is not only the strength of the U.S. economy, but also the political fortunes of Obama himself as well as legislators heading into next year's presidential and congressional elections.

The Obama administration says Congress must raise the debt limit, the amount of money the U.S. government is allowed to borrow, by the Aug. 2 deadline or the U.S. won't be able to meet its financial obligations.

Republicans, who control the House of Representatives, oppose increasing the limit without slashing spending to lower the huge budget deficit. Democrats say tax increases are a prerequisite for big spending cuts; Republicans rule out the idea unless taxes are lowered elsewhere.

The president spoke at a White House news conference the morning after convening a rare Sunday meeting with legislators in the White House, where he continued to push for a deal in the range of $4 trillion worth of deficit cuts over the coming decade. That ran into Republicans' refusal to raise taxes. Momentum is clearly on the side of a smaller measure of perhaps half that size.

Obama conceded that House Speaker John Boehner, who pulled his support for a large-scale deal over the weekend, faced a potential revolt by his caucus, and suggested Republicans should take a political risk as the Democratic president said he is ready to do.

"I am prepared to take on significant heat from my party to get something done," Obama said, contending he has "bent over backward" to work with Republicans.

Despite the signs of stalemate, Obama also declared, "We will get this done by Aug. 2."

Obama renewed his case Monday for the $4 trillion package that would put a huge dent in the country's deficits by blending politically poisonous elements for both parties tax hikes opposed by Republicans, and social service cuts that Democrats decry.

"Now is the time to deal with these issues. If not now, when?" the president asked, repeating a comment he made in private Sunday to legislators. The congressional leaders were meeting again later Monday at the White House, and Obama has said he'll call them to meet every dayuntil the partisan deadlock is broken.

Last week, Boehner and Obama had private talks that led Democrats to believe the House Speaker was willing to entertain revenue increases as part of a full overhaul of the tax code later this year in exchange for Democrats agreeing to stiff curbs on the growth of social benefit programs.

But Boehner abandoned the idea Saturday night in a move that rattled the talks.