Washington (CNN) -- After a fifth meeting in five days failed Thursday to achieve a deficit reduction deal, President Barack Obama told top congressional leaders to reach an agreement on the path forward by early Saturday, officials said.
Obama will hold a news conference at 11 a.m. Friday to discuss efforts to reach a deal on the debt ceiling and budget cuts, according to a senior administration official.
No formal negotiations are planned Friday.
A Republican aide familiar with Thursday's meeting at the White House said Obama told congressional leaders he expected them to consult with their caucuses and find agreement over the next 24 to 36 hours on how to proceed. If the group is unable to reach a compromise, the president suggested another meeting would be called this weekend, the aide told CNN.
The president made it clear at Thursday's cordial meeting that he opposes a short-term deal and still wants a plan that trims the federal deficit by $4 trillion, said a Democrat familiar with the talks.
The administration team also discussed extending the payroll tax cut -- including perhaps expanding it to further improve job creation -- as well as extending unemployment insurance, the Democrat said.
The seriousness of the situation was reinforced Thursday when a major credit rating agency, Standard and Poor's, said it was placing the United States' sovereign rating on "CreditWatch with negative implications."
"Owing to the dynamics of the political debate on the debt ceiling, there is at least a one-in-two likelihood that we could lower the long-term rating on the U.S. within the next 90 days," Standard and Poor's said in a statement.
Moody's Investors Services -- another major rating agency -- Wednesday said it would put the sterling bond rating of the United States on review for possible downgrade.
Senate Minority Leader Mitch McConnell called Thursday's 80-minute session a good meeting and said, "We'll continue to discuss a way forward over the next couple of days and see what happens."
House Majority Leader Eric Cantor, R-Virginia, who had a tense exchange with Obama during Wednesday evening's meeting, said nothing at Thursday's talks, a Democratic aide said.
During Thursday's meeting, Treasury Secretary Timothy Geithner warned the group that the world financial markets' concerns are twofold: The debt ceiling must be raised, and leaders must put in place a plan to deal with the deficit and debt, according to the Republican aide.
House Speaker John Boehner, R-Ohio, reiterated his concern that nothing the administration is offering will resolve the debt problem, the aide added.
Obama indicated a smaller deficit cut was a possibility if other concessions were made.
Earlier, the White House said negotiators will have to shift their focus to increasing the federal debt ceiling if they fail to make significant progress by the end of this week toward a deal that would cut spending and raise taxes.
Administration officials have warned that a failure to raise the current $14.3 trillion debt ceiling by August 2 could trigger a partial default. If Washington lacks the money to pay its bills, interest rates could skyrocket and the value of the dollar could decline, among other things.
Republicans have tied their support for a debt-ceiling increase to steps to reduce mounting federal deficits such as deep spending cuts and reforms to entitlement programs. Democrats agree on the need for a deficit reduction plan, but the two sides remain divided over the size and scope of a deal as time runs out for getting the debt ceiling raised to ensure the government can pay all its bills.
A default "would be a calamitous outcome," Federal Reserve Chairman Ben Bernanke told members of the Senate Banking Committee on Thursday. "It would create a very severe financial shock that would have effects not only on the U.S. economy but the global economy."
In addition, Bernanke said, "it would be a self-inflicted wound."
Obama warned earlier this week he could not guarantee that older Americans will receive their Social Security checks next month if a deal is not reached. GOP leaders accused the president of using scare tactics.
For their part, Republicans continued to oppose Obama's call for increased tax revenue to be part of a deficit reduction deal, and promised Thursday to renew the GOP's push for a balanced budget amendment to the Constitution, arguing that it's necessary to achieve fiscal stability. Votes in Congress on the measure are expected next week.
"We refuse to let this president use the threat of a debt limit deadline to get us to cave on tax hikes or phony spending cuts," said McConnell, R-Kentucky.
Others said the whole debate is a sad reflection of an increasingly dysfunctional political process.
"I am very disappointed in the United States Senate," said Sen. Bob Corker, R-Tennessee. "I am very disappointed in the White House. I am very disappointed in all of us. I am very disappointed in the childish behavior that this body has continued to exude over the course of this entire year."
The Democratic message Thursday was that a few Republicans spurred by the conservative tea party movement were preventing the possibility of a major agreement that could help address mounting federal deficits over the next decade and clear the way for Congress to increase the debt ceiling.
Wednesday's negotiations ended on a tense note. Obama said the extended political wrangling and apparent lack of progress confirmed what the public considers to be the worst of Washington, according to Democratic sources familiar with the talks who spoke on condition of not being identified.
"This could bring my presidency down," sources quoted Obama as saying in reference to his pledge to veto any short-term extension of the debt ceiling -- a move suggested by Cantor. But "I will not yield on this," the president added.
Obama has insisted on one deal that will raise the amount of money the government can borrow to sufficient levels to last through 2012 -- after his campaign for re-election.
According to Cantor, Obama became "very agitated" on the state of the talks and said "something's gotta give."
Obama called for Republicans to compromise on either their insistence that a debt-ceiling hike must be matched dollar-for-dollar by spending cuts or on their opposition to any kind of tax increase, Cantor said.
"And he said to me, 'Eric, don't call my bluff.' He said 'I'm going to the American people with this,'" Cantor quoted Obama as saying.
"I was somewhat taken aback," Cantor said.
Democratic sources provided a different take on the exchange, saying Obama cut off Cantor at the end of the two-hour meeting after the GOP leader dumped his previously held position against a short-term extension.
Senate Majority Leader Harry Reid, D-Nevada, said Thursday that "Cantor has shown he shouldn't even be at the table, and Republicans agree he shouldn't be at the table."
For his part, Boehner downplayed reports of a split between himself and Cantor. Analysts have speculated that Cantor, viewed in some circles as more conservative than Boehner, may be using the crisis to undermine GOP support for the speaker.
"We're in the foxhole" together, Boehner told reporters. "I'm glad Eric's there."
Reid confirmed Thursday that he and McConnell are working on a possible debt ceiling measure that could come up in the event the broader negotiations fail to reach agreement. It is based in part on a plan McConnell unveiled this week that would set up three short-term increases in the debt ceiling while at the same time registering the disapproval of Congress for such a move.
McConnell's proposal would give Obama power to raise the debt ceiling by a total of $2.5 trillion, but also would require three congressional votes on the issue before the 2012 general election.
With time dwindling, Democrats and Republicans remain at sharp odds over how to proceed. Obama has indicated a preference for a "grand bargain" that would save up to $4 trillion over the next decade through a combination of spending cuts, raising taxes on the wealthiest Americans and reforming politically popular entitlement programs such as Medicare and Medicaid.
At the heart of Obama's call for more tax revenue would be allowing tax cuts from the Bush presidency to expire at the end of 2012 for families making more than $250,000. His plan would keep the lower tax rates for Americans who earn less.
Obama noted earlier this week he is not looking to raise any taxes until 2013 or later. In exchange, Obama said, he wants to ensure that the current progressive nature of the tax code is maintained, with higher-income Americans assessed higher tax rates.
Republicans continue to insist such a move would be economically disastrous.
At the heart of the GOP resistance is a bedrock principle pushed by conservative crusader Grover Norquist against any kind of tax increase. A pledge pushed by Norquist's group, Americans for Tax Reform, has been signed by more than 230 House members and 40 senators, almost all of them Republicans.
CNN's Ted Barrett, Kate Bolduan, Jennifer Liberto, Dan Lothian, Jessica Yellin, Kevin Bohn, Deirdre Walsh and CNNMoney contributed to this report.