U.S. President Barack Obama says he is not giving up hope for what he calls a “grand bargain” to raise the country's borrowing limit, while also slashing the nation's debt.

White House spokesman Jay Carney said Wednesday there is still time for Republicans and Democrats to reach an agreement. Less than two weeks remain before the government would begin defaulting on its $14.3-trillion debt.

Carney also said Mr. Obama will accept a short-term deal to raise the debt limit as part of a broader deficit reduction plan.

The president has previously rejected short-term measures to raise the debt ceiling. But Carney said Mr. Obama would consider an exception to allow extra time for a sweeping bill to work its way through the legislative process.

On Wednesday, President Obama held talks at the White House with congressional leaders on a plan put forth by a bipartisan group of U.S. senators known as the “Gang of Six.”

The plan calls for $500 billion in immediate spending cuts as part of a larger effort to slash spending by nearly $4 trillion in the next decade. It also would make significant changes to major social welfare programs and raise $1 trillion in tax revenues over 10 years.

The U.S. is facing an August 2 deadline to raise the $14.3-trillion debt ceiling, or start defaulting on some of its obligations for the first time in history. Efforts to forge an agreement have stalled because of stark disagreements on raising revenues and making cuts to social safety net programs.

On Tuesday, the Republican-controlled House of Representatives approved a plan to raise the debt ceiling in exchange for cutting more than $100 billion from the federal budget next year. The so-called Cut, Cap and Balance Act would also require a constitutional mandate for a balanced federal budget.

Mr. Obama has said he will not support the measure.