U.S. President Barack Obama has become directly involved in the stalled negotiations over the national debt and federal borrowing limit, meeting with the top Senate Democratic and Republican leaders to discuss the issues.

President Obama held talks Monday with Democratic Senate Majority Leader Harry Reid. Afterwards, White House spokesman Jay Carney said the president left the meeting with Reid convinced a “significant” deal remains possible.

Mr. Obama also met with Republican Senate Minority Leader Mitch McConnell later in the day. The president's spokesman said nothing about a possible joint negotiating session that the president might have in addition to the one-on-one talks with key congressional leaders.

The United States risks defaulting on its $14 trillion national debt unless Congress raises the debt ceiling by August 2. Republicans, who control the House of Representatives, insist that the rate at which the U.S. incurs debt must be cut sharply if they are to vote to raise the limit. The debt ceiling is the legal limit on the amount the U.S. government is allowed to borrow.

Republicans are demanding huge cuts in government spending with no tax increases. Democrats say Republicans are holding the debt ceiling vote hostage to an ultra-conservative fiscal agenda the Republicans could never enact on their own.

The head of the U.S. central bank, Benjamin Bernanke, says politicians must not allow the government to default on its loans, saying even a short-term break in payments could cause “severe disruptions” in financial markets.

The Federal Reserve chairman also said the debt ceiling should not be used as a bargaining chip to force the government to reduce its spending deficit.

U.S. Treasury Secretary Timothy Geithner has also warned that the U.S. could face “catastrophic consequences” if lawmakers fail to raise the debt limit.

Last week, Republican lawmakers walked out of key debt ceiling talks chaired by Vice President Joe Biden, saying the negotiations had reached an impasse due to White House demands for tax increases.

The two top Republicans in the House of Representatives, Speaker John Boehner and Majority Leader Eric Cantor , said they will not accept tax increases as part of the debt ceiling negotiations.

Cantor said it is time for President Obama to speak clearly and resolve the tax issue. The White House responded by accusing Republicans of supporting tax cuts for the rich at the expense of average Americans.