U.S. lawmakers plan to meet with President Barack Obama at the White House for a fourth straight day Wednesday, trying to find a compromise on reducing the budget deficit in order to gain Congressional approval for increasing the nation’s borrowing limit and avoiding a possible default.

On Tuesday, the top Senate Republican, Mitch McConnell, said it may not be possible to reach a long term budget solution, dismissing President Barack Obama’s proposals for deficit reduction as “smoke and mirrors” . Instead, he proposed that the president use parliamentary maneuvers to raise the debt ceiling without Republican support.

McConnell’s suggestion came after a coalition of business groups sent a letter to the president and lawmakers warning that any default would have a disastrous impact on the economy, and calling it a risk the country must not take.

The letter said the two sides need to reach a long-term agreement on cutting the country’s budget deficit in order to promote investment and job creation.

President Obama told CBS on Tuesday that he cannot guarantee there will be money to fund millions of pension checks scheduled to go out on August 3, unless a deal can be made with opposition Republicans on the difficult budget issues.

Mr. Obama and Republicans in Congress have sharply different ideas on how to reduce the federal budget deficit and pay down the government’s debt. Republicans have made reaching an agreement a condition for and increase in the current $14.3 trillion legal limit for the amount of money Washington can borrow. An agreement must be reached by August 2 if the United States is to avoid default on some payments.

The president has proposed a $4 trillion package of spending cuts and revenue increases over 10 years, but the Republicans say they will not allow tax increases and want to focus only on cutting government spending.

Democrats strongly oppose cuts in social programs for the poor and elderly. They say raising taxes and closing tax loopholes for the wealthy and big corporations is essential because the government needs more revenue to close the budget gap.

Republicans say it makes no sense to raise taxes on wealthy people who can invest in the economy and create jobs. The speaker of the House of Representatives, Republican John Boehner, has said no deal can pass the House unless it rules out tax increases and cuts spending.

Treasury Secretary Timothy Geithner said Tuesday the two sides understand what it will take to reach a deal and come to an agreement. He has warned previously that failing to raise the $14.3 trillion legal limit on what the government can borrow to pay its debts would be “catastrophic.”