Republican leaders in the House of Representatives walked away from talks Friday aimed at raising the US debt ceiling and cutting the deficit, dpa reported.
Barack Obama told reporters that Speaker of the House John Boehner had told him he was abanonding the talks even as the sides discussed deep cuts to government programmes and closing tax loopholes.
Obama called on Republicans to make tough compromises, saying he had been willing to make decisions that came under sharp attack from members of his own party.
"This was an extraordinarly fair deal," Obama said. "If it was unbalanced, it was unbalanced in the direction of not enough revenue."
The president said he had offered Boehner and other Republicans more than 1 trillion dollars in cuts in domestic and defence spending, 650 billion dollars in cuts to entitlement programmes such as pensions and health care, and 1.2 trillion dollars in additional revenue through closing tax loopholes and deductions. But Boehner said he could not agree to a deal that would raise taxes.
With an August 2 deadline looming for an agreement on the nation's debt ceiling, Obama called lawmakers to the White House for a Saturday morning meeting on raising the 14.3-trillion-dollar borrowing limit.
The negotiations have been tense on a possible agreement to reduce government costs by up to 4 trilion dollars over 10 years to curb the country's deficit alongside increasing the debt ceiling. That ongoing tug-of-war pits Republicans refusing to support revenue increases against Democratic resistance to cutting pensions and other social spending.
Obama has been pursuing the separate "grand bargain" with Republican leaders who control the House, looking for a deficit-busting deal that would accompany raising the debt limit. But news that no specific tax increases were foreseen in the latest round of talks provoked outrage among the Democratic rank and file.
On Wall Street, worry was growing that the debt ceiling would not be raised in time to avoid default.
The Treasury Department and US economists have warned of a dire financial crisis if the US defaults on its debt. The US would lose its stellar credit rating and interest rates would soar not only for government debt but also for consumer spending, college loans and home mortgages, putting further downward pressure on an economy that is only slowly recovering from the 2007-2009 recession.