U.S. President Barack Obama says Congress must act soon to raise the government debt limit, while also reducing the U.S. budget deficit.

During a news conference at the White House on Wednesday, Mr. Obama told reporters that no one wants to see the U.S. default on its $14 trillion national debt, saying “we have to seize this moment and we have to seize it soon.”

He warned if the U.S. defaults on its debt, the impact on the country's economy would be significant and unpredictable.

Vice President Joe Biden has been leading talks between Democrats and Republicans in an effort to increase the amount of money the government is allowed to borrow before an August 2 deadline. Republicans, who control the House of Representatives, say they will not raise the debt ceiling without deep spending cuts.

President Obama told reporters the two sides had identified more than $1 trillion in spending cuts, but the government must also increase revenue in part by making millionaires and billionaires pay more taxes. He said big oil companies and corporate jet owners are not hurting financially and should not enjoy tax breaks no one else gets.

Mr. Obama is scheduled to meet with Senate Majority Leader Harry Reid and other Democratic Senators about the debt ceiling later Wednesday.

He expressed confidence a deal will be reached on the debt and deficit.

Talks between Democrats and Republicans stalled last week after Republicans accused the White House of using the crisis to push for tax increases.

Mr. Obama said Wednesday that he wants to extend tax cuts for middle class families and that he would support additional tax cuts that could help stimulate long-term economic growth even if it costs the government more money now.

He said relying exclusively on spending cuts to reduce the deficit would require the government to cut scholarship programs for college students and ask older Americans to pay more for medical care.

The head of the U.S. central bank, Ben Bernanke, has said 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.