Obama firm on tax increase

President Barack Obama

WASHINGTON -- President Barack Obama prodded Congress on Tuesday to reach a long-term deal within the next two weeks to raise the nation's borrowing limit rather than "kick the can down the road" with a makeshift, short-term solution, and he declared that it must include the tax increases Republicans strongly oppose.

He said he has summoned leaders of both parties to the White House on Thursday to try to get it done and beat an Aug. 2 deadline to avert a first-ever federal default that could shake economic markets worldwide.

Obama said he opposed a stopgap, short-term increase, as suggested by some lawmakers. But he stopped short of ruling out a limited extension, and his spokesman later declined to say whether the president would veto such a measure.

Obama renewed his stand that any deal must include not only spending cuts but also new revenue -- tax increases vehemently ruled out by many Republicans in Congress.

"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.

"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 some real differences," the president said.

He said congressional leaders from the House and Senate, Republicans and Democrats, were being invited to meet on the issue Thursday at the White House. That would bring the top eight lawmakers together with Obama and top administration financial officials.

Experts have said that 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 by Aug. 2.

Despite the president's optimism, it remained unclear where compromise could be found. Republicans are insisting that 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, including those Obama wants targeting the wealthiest Americans or closing loopholes to corporations.

"It's my hope that everybody's going to leave their ultimatums at the door, that we'll all leave our political rhetoric at the door, and that we're going to do what's best for our economy and do what's best for our people," Obama said.

Despite calling on others to leave ultimatums behind, Obama stuck to his -- that any deal must include new tax revenue.

"We need to take on spending in the tax code, spending on certain tax breaks and deductions for the wealthiest of Americans," Obama said.

The White House is proposing about $400 billion in increased tax revenues.