Obama challenges GOP: Raise taxes on wealthy


"You can't reduce the deficit to the levels that it needs to be reduced without having some revenue in the mix," Obama said. "And the revenue we're talking about isn't coming out of middle-class families who are struggling. It's coming out of folks who are doing extraordinarily well."

Obama held open the possibility of keeping Congress in Washington unless there is significant progress by week's end on a deal to cut deficits, raise the $14.3 trillion debt limit and avert a threatened financial crisis.

"You stay here. Let's get it done," Obama said.

The International Monetary Fund publicly urged lawmakers to raise the U.S. debt limit, warning that failure to do so could produce a spike in interest rates and "severe shock to the economy and world financial markets."

Obama said a plan must be in place by Aug. 2, a date he called "a hard deadline."

Debt negotiations stalled last week between the administration and Congress. Vice President Joe Biden had been meeting for weeks with Congressional leaders from both parties in an effort to hash out an agreement, but those talks broke down once House Majority Whip Eric Cantor left the negotiations.

Now, the president is trying to get the talks back on track. Attempting to blunt Republican criticism, he said he also wants to extend existing middle class tax cuts.

"The tax cuts I'm proposing we get rid of are tax breaks for millionaires and billionaires, tax breaks for oil companies and hedge fund companies and jet owners," he said.

Obama also called on Congress to renew a payroll tax cut that took effect on Jan 1, one of several steps he said lawmakers can take quickly to help reduce 9.1 percent unemployment.

The Associated Press and ABC News contributed to this report.

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