U.S. President Barack Obama says it is time to set aside politics and make a deal with both parties in Congress that will allow the United States to keep borrowing money, while cutting government deficits and debt.

At a news conference Monday in Washington, Mr. Obama said he will meet with opposition Republicans and his Democratic party allies in Congress every day until an agreement is reached. He told journalists there is “a lot of work to do” to get an agreement.

Washington faces an August 2 deadline to reach an agreement or face a possible unprecedented default on U.S. debt.

Republicans say they will not agree to any tax increases, while Mr. Obama’s Democratic Party allies in Congress strongly oppose cuts in the programs that give income and health care to the elderly and poor.

Mr. Obama said a default would drive up interest rates and could trigger another economic recession. U.S. Treasury Secretary Timothy Geithner has said failing to raise the $14.3 trillion legal limit on what the government can borrow to pay its debts would cause “catastrophic damage” to the U.S. economy.

The new head of the International Monetary Fund, Christine Lagarde, has said a U.S. default would have “real nasty consequences” for the global economy, including higher interest rates and falling stock prices. But she told a news program on Sunday that she cannot imagine U.S. leaders letting the nation default on its debts.

The most recent negotiating session between the President and key Republicans ended Sunday with no apparent progress.