President Barack Obama and the Republican Congressional leaders, who met at the White House a for a marathon discussion on the proposed budget cuts, failed on Tuesday to resolve the crisis which now threatens a government shutdown in a week's time.

While the Democrats had proposed a $33-billion package of domestic program cuts, the Republicans demanded spending cuts worth at least $40 billion.

We're going to fight for the largest cuts possible — real cuts ... We've made clear that Democrats' $33-billion proposal is not enough, and much of it is based on gimmicks, House Speaker John A. Boehner (R-Ohio), said.

The Senate majority leader Harry Reid (D-Nev.) said he was not hopeful that a resolution will be hammered out by the weekend.

However, making a surprise appearance at the White House briefing room, President Barack Obama said he hoped there would be an agreement. Everybody has got to make some sacrifices. Everybody has got to take a haircut. And we've been willing to do that, the president said.