Obama says US debt default \'not acceptable\'

"I continue to push congressional leaders for the largest possible deal," Obama said, ruling out a short-term fix and vowing to negotiate every single day on the budget and debt ceiling if needed to avert a potentially disastrous US default.

Obama used the "bully pulpit" of the White House to address the American people directly on the issue and turn up the heat on Republican foes to break down a weeks-long impasse and forge a deal.

"I do not see a path to a deal if they don\'t budge period. I mean, if the basic proposition is, it\'s my way or the highway, then we are probably not going to get something done, because we have got divided government," he said.

All sides in polarized Washington have said they seek a deal to narrow the yawning US national debt while approving an increase in Washington\'s statutory limit on how much it can borrow, averting a historic debt payment default.

But Republicans have balked at a Democratic push to raise taxes on the richest US earners and wealthy corporations as part of any plan to slice deep into government spending, saying doing so would smother job growth.

And Democrats have vowed to defend cherished social safety net programs like the Medicare health insurance for the elderly and disabled as well as Social Security retirement payments.

"I am prepared to take on significant heat from my party to get something done," Obama said. "I expect the other side should be willing to do the same thing if they mean what they say, that this is important.

"I have bent over backwards to work with the Republicans to try to come up with a formulation that doesn\'t require them to vote sometime in the next month to increase taxes."

The talks are part of a final major push to reach a deal to raise the congressionally determined limit on US borrowing, now set at $14.29 trillion, in the face of a budget deficit expected to hit $1.6 trillion this year.

The US hit the ceiling on May 16 but has since used spending and accounting adjustments, as well as higher-than-expected tax receipts, to continue operating without impact on government obligations.

By August 2, though, the government will have to begin withholding payments to bond holders, civil servants, retirees or government contractors, and the White House has urged a deal by July 22 to have time for Congress to pass it.

Economists warn that if the United States defaults, it could lose its ability to borrow, souring fraught financial relations with creditors like China and sending the already sour global economy into a tailspin.

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