Obama demands higher debt limit

He warned that the government might otherwise struggle to pay benefits for veterans and the elderly and cautioned Republicans not to trade spending cuts in exchange.

Mr Obama said he was willing to negotiate cuts but that such talks were separate from decisions to raise debt ceiling and avert the US's first national default.

"The full faith and credit of the US is not a bargaining chip and they better decide quickly because time is running short."

In a blunt rebuttal to Republicans who reject any more tax increases, he said both taxes and spending must be considered.

Politicians face three distinct deadlines before April 1.

The debt limit must be raised to prevent a default, a series of spending cuts will kick in on March 1 and money for most federal programmes will run out on March 27.

But Mr Obama said Republicans "will not collect a ransom in exchange for not crashing the economy."

In his first term, Democrats had accused him of giving ground too easily on the debt ceiling issue during a huge partisan fight in the summer of 2011.

That battle resulted in an unprecedented downgrade of the US's credit rating and left in place contentious Bush-era income tax cuts.