|Obama has proposed to slice trillions of dollars from social security programmes, but wants tax increase for rich [EPA]
As an August deadline looms before his government to pay its debt, the US president has said "time is running out".
"We're running out of time. That's the main concern that I have at this point," Barack Obama said on Friday at a White House news conference.
"Show me a plan in terms of what you are doing in terms of debt and deficit reduction. If they show me a serious plan I am ready to move even if it requires me to make some tough decisions," he said.
Obama is under growing pressure to reach a deal with his Republican rivals on raising the US debt ceiling in order to avoid a default on its payments.
And on Friday, he once again pushed his so called "grand bargain."
His proposal is to slice millions of dollars from programmes helping the poor and elderly, in return for closing some tax loopholes for the rich to increase government revenue.
Obama, who warned earlier in the week that seniors might not receive Social Security checks if the country went into default, said interest rates would also rise on Americans' home and car loans.
It would be, he said, "effectively a tax increase on everybody."
But Republicans have said that amounts to raising taxes, something they have said is non-negotiable.
Representatives from both parties have said the deadlock is not simply a matter of political theatre, but a sincere attempt to meet their voters' wishes.
John Boehner, the House of Representative Speaker, said, "They have been unwilling to put a real plan on the table. Without serious spending cuts, without real reforms to entitlement programs, this problem is not going to be solved."
Congress must raise the $14.3 trillion limit on America's borrowing by August 2 or the government will run out of money to pay its bills.
The White House says Obama has agreed to roughly $1.7 trillion in spending cuts and wants tax increases to fill out the rest of a plan to increase the debt ceiling long enough to get the country through 2012, when Obama and most members of congress are up for re-election.
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Obama has urged his Republican opponents to drop their resistance to higher taxes and agree to a large measure that would include spending cuts and heavier taxes on wealthier Americans.
He said he has reluctantly agreed to spending cuts and reforms of popular but expensive social programmes and wants Republicans to make concessions as well.
With both sides entrenched, a last-ditch plan offered by Senate Republican Leader Mitch McConnell may be the best hope for a solution.
McConnell's plan would establish a legal framework to raise the debt limit and put nearly all the burden on Obama to carry it out. Senate Democrats are working to modify the plan, but it remains unpopular with conservatives.
Financial markets are starting to worry as a bipartisan agreement seems elusive at least for now.
Ratings agencies Moody's and Standard & Poor's have signaled they may cut the gold-plated US credit rating if the borrowing limit is not raised.
Even if the United States does not default, its rating will be under pressure if negotiators did not agree to long-term deficit reduction.
China, the US's biggest foreign creditor with more than $1 trillion in US debt, has also urged Washington to adopt responsible policies to protect investor interests.
Experts say failure to seal a deal would cause turmoil in global financial markets and could force the United States into another recession.