Obama warns differences may be too wide to reach deficit deal

U.S. President Barack Obama speaks after a meeting with Congressional leaders in the Oval Office at the White House in Washington March 1, 2013.

WASHINGTON (Reuters) - President Barack Obama warned it may be impossible to reach a deal with congressional Republicans on trimming the budget deficit even as he headed back to Capitol Hill to try to thrash out the issue with his political opponents.

"Ultimately, it may be that the differences are just too wide," Obama said in an interview with ABC, which aired on Wednesday.

Obama was set to go to Congress to meet Republicans in the House of Representatives, with whom he has fought for two years over how to rein in the deficit and cut national debt.

Obama and his fellow Democrats have pushed for more tax revenues from the wealthy, by raising taxes and by closing loopholes.

After agreeing to a tax hike on the rich in a year-end fiscal deal, Republicans have insisted that Democrats do more to curb government spending and reform expensive social programs like Medicare for the elderly.

Obama wants to find a "balance" between the two approaches, but in the ABC interview he said he disagreed with a proposal by House Republican Paul Ryan to balance the budget in 10 years because it would slash social programs too deeply.

"It may be that ideologically, if their position is, 'We can't do any revenue,' or, 'We can only do revenue if we gut Medicare or gut Social Security or gut Medicaid' - if that's the position, then we're probably not going to be able to get a deal," Obama said.

He acknowledged that he may have to step away from negotiations for Republicans and Democrats to be able to reach a deal in the sharply divided Congress.

"At some point, I think I take myself out of this. Right now, what I'm trying to do is create an atmosphere where Democrats and Republicans can go ahead, get together, and try to get something done," Obama said.

The president met with Senate Democrats on Tuesday and some warned him not to compromise their liberal principles in return for a budget deal.

On Thursday, he will meet separately with Senate Republicans and House Democrats.

(Editing by Alistair Bell and Christopher Wilson)