WH official: Obama won't negotiate on debt limit

But some Republicans have suggested they would like to extract more spending cuts and tax reform from an agreement to raise the limit and avoid default, although it is uncertain whether those demands would command enough support with their rank-and-file. 

Instead, Sperling said, Obama wants to work with lawmakers to craft "a pro-growth, pro-jobs, pro-confidence budget agreement" because "let's be clear, the status quo doesn't support any long-term objectives." 

"We need an honorable compromise and a sensible budget agreement without a threat of default," Sperling said. 

Sperling said the debt prioritization bill passed by the House on Thursday doesn't cut it and should be "a nonstarter to anyone serious about the U.S. economy," he said. 

"It's default by another name."

Every House Democrat opposed the bill in a 221-207 vote.

Obama is maintaining his so-called charm offensive by sitting down with a broad mix of congressional Democrats and Republicans in an effort to stockpile ideas that could be included in a budget deal. 

Sperling said those talks over dinner between lawmakers and the president "have instilled some significant trust," and "we're still working on that."

Part of any agreement would be to nix the $80 billion sequester that "does absolutely nothing to deal with long-term challenges" and was "designed to be so stupid it wouldn't take place," Sperling said.

The run up to the 2011 debt ceiling damaged the nation's confidence and economic recovery, he said. 

"Those serious about economic recovery should not even be contemplating putting country through that kind of countdown clock again," he said. 

Josh Earnest, a White House spokesman, said "it would be a nice change of pace" for Congress to work with the administration on policies that support the economic recovery. 

Congress voted in January to suspend the debt limit until May 19 with the understanding that the now $16.8 trillion limit would increase to reflect additional borrowing since then. 

Higher than expected tax revenues, a boost in payments from Freddie Mae and Freddie Mac, along with lower spending should give lawmakers more time to craft a compromise. The Bipartisan Policy Commission said, at this rate, the ceiling will be hit in mid-October.