President Barack Obama on Monday increased pressure on Republican lawmakers to make concessions for a deal to avoid an August 2 debt default and said both sides must pull off the Band-aid and make sacrifices.

If not now, when? Obama said.

The president met for 90 minutes with top U.S. lawmakers for a second-straight day in the search for a way to break a budget impasse that is holding up a vote on raising the $14.3 trillion debt ceiling, which caps how much money Washington can borrow.

It was not immediately clear as the meeting broke up whether any progress had been made toward a deal. A new round of talks was scheduled for Tuesday.

The Treasury Department has warned it will run out of money to cover the country's bills if Congress does not increase its borrowing authority by August 2. Failure to act could push the United States back into recession, send shock waves through global markets and threaten the dollar's reserve status.

U.S. stocks suffered their worst day in nearly a month on Monday mainly over investor concerns about the stalemate in Washington and growing debt problems in the euro zone.

Congress needs to raise the debt ceiling and they must do so without delay. It's an unfortunate reality, but it must be done, said Tom Donohue, president of the pro-business U.S. Chamber of Commerce.

Obama discussed with the lawmakers a deficit-reduction plan negotiated by a group led by Vice President Joe Biden. The plan had included up to $2 trillion in spending cuts but fell apart over Democratic demands that it include an end to $400 billion in tax loopholes.

Obama ruled out a short-term increase in the debt ceiling that some Republicans have proposed in order to buy more time to negotiate tougher issues.

The things that I will not consider are a 30-day or a 60-day or a 90-day or a 180-day temporary stopgap resolution to this problem. This is the United States of America, and we don't manage our affairs in three-month increments, he said.

Obama used the latest in a series of White House news conferences to urge lawmakers on both sides to stop putting off the inevitable and agree to tax increases and cuts in popular entitlement programs, trying to persuade Americans he is the grownup in a bitter summer battle over spending and taxes.

OBAMA PRESENTS HIMSELF AS CENTRIST

Obama is seeking to cast himself as a centrist in the bitter debate. His 2012 re-election hopes hinge not only on reducing America's 9.2 percent unemployment but on his appeal to independent voters who are increasingly turned off by partisan rancor in Washington and want tougher action to get the country's fiscal house in order.

What I've said to the leaders is, bring back to me some ideas that you think can get the necessary number of votes in the House and in the Senate. I'm happy to consider all options, he said.

Republicans are adamantly opposed to raising taxes while Obama's Democrats are equally determined to guard against cuts in Social Security, Medicare and Medicaid, the sacred cow pension and healthcare programs for the poor and elderly.

House of Representatives Speaker John Boehner, the top U.S. Republican, said he and Obama agree that current levels of spending, including entitlement spending, are unsustainable.

The president and I do not agree on his view that government needs more revenues through higher taxes on job creators, Boehner told reporters on Capitol Hill shortly before heading to the White House.

Obama said he is willing to accept some pain on his side but expects Republicans to move in his direction.

He wants a $4 trillion, 10-year deficit-reduction deal that Boehner walked away from on Saturday out of concern it would raise taxes.

It's not going to get easier; it's gonna to get harder.

So we might as well do it now, pull off the Band-Aid, eat our peas. ... I'm prepared to take on significant heat from my party to get something done. And I expect the other side should be willing to do the same thing, Obama said.

It was unclear whether Obama would be able to persuade Republicans to agree to a larger deal after Boehner balked over the weekend, meaning the two sides may have to negotiate a smaller, $2 trillion deal.

Obama said he has bent over backwards to work with the Republicans to try to come up with a formulation that does not require them to vote sometime in the next month to increase taxes.

Obama said he has been trying to negotiate a proposal in which taxes would not go up immediately, but in later years.

(Additional reporting by Matt Spetalnick, Patricia Zengerle, Laura MacInnis, Kim Dixon, Deborah Charles and Thomas Ferraro in Washington and Angela Moon in New York)

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