President Obama warns Congress against short-term deal on debt limit

WASHINGTON -- President Barack Obama prodded Congress on Tuesday to make a deal within the next two weeks on raising the nation's borrowing limit, and he said he was summoning leaders of both parties to the White House this week to try to get it done.

Obama said he opposed any effort to "kick the can down the road" with a short-term increase, as suggested by some lawmakers -- though he stopped short of ruling that out. He reiterated his position that any deal must include not only spending cuts but also new revenue -- tax increases ruled out by Republicans.

"We need to come together over the next two weeks to reach a deal that reduces the deficit and upholds the full faith and credit of the United States government and the credit of the American people," Obama said at the White House.

"We've made progress, and I believe that greater progress is within sight, but I don't what to fool anybody -- we still have to work through real differences," the president said.

He said congressional leaders were being invited to meet Thursday at the White House.

Obama spoke as the Aug. 2 deadline for raising the nation's borrowing limit came closer. Experts say lawmakers must waste no time in making a deal if they are to have any chance of getting it finalized and passed through both chambers of Congress in time.

Despite the president's optimism, it remained unclear where compromise could be found. Republicans are insisting they will note vote to raise the debt limit without major spending cuts; Democrats are refusing to sign off on cuts of such magnitude without at least some tax increases as well. Republicans say they won't sign off on any tax hikes at all, including those Obama wants targeting the wealthiest Americans or closing loopholes to corporations.

The administration says that if the government's borrowing limit is not increased by Aug. 2, the U.S. will face its first default ever, potentially throwing financial markets into turmoil.