With both sides dug into their positions, it's not clear how compromise will be reached, though the Senate canceled its plans to take a July Fourth recess next week in order to stay in Washington and work on the problem.

Continue reading

Obama expressed confidence a deal could be made and instead of singling out Republicans as the barriers to agreement, he directed his message to Democrats and Republicans alike.

"We've got to cut the deficit, but we can do that while making investments in education, research and technology that actually create jobs," the president said. "We can live within our means while still investing in our future. That's what we have to do. And I'm confident that the Democrats and Republicans in Congress can find a way to give some ground, make some hard choices, and put their shoulders to wheel to get this done."

Republicans used their weekly address to criticize Obama on the economy and renew their opposition to tax increases.

"The president and Democrats in Congress must recognize that their game plan is not working. It's time to acknowledge that more government and higher taxes is not the answer to our problem," said Sen. Dan Coats, R-Ind. "It's time for bold action and a new plan to address our current crisis."

Coats said that it was time for the government to "stop spending money we don't have and to enact policies that will grow our economy and get Americans back to work."