* Obama, Republicans discussed targets, not specifics
* Entitlement programs on the table
* Pelosi: Democrats won’t support Social Security cuts
* Obama says negotiators will meet again on Sunday (Adds details from meeting)
By Steve Holland and Andy Sullivan
WASHINGTON, July 7 (Reuters) - President Barack Obama told top U.S. lawmakers on Thursday he would not sign a short-term extension of the U.S. debt ceiling and said negotiators would work through the weekend on a deal to avoid a debt default.
Trying to break a budget deadlock and allow for an increase in the debt ceiling with an Aug. 2 deadline approaching, Obama and congressional leaders are aiming for more than $2 trillion in budget savings and possibly as much as $4 trillion.
Inside the White House Cabinet Room, Obama urged congressional leaders to take a big step toward resolving the country’s debt and deficit woes, a position in which he found agreement from the top U.S. Republican, House of Representatives Speaker John Boehner, sources said.
In the 90-minute meeting, Obama rejected proposals floated by some Republicans for a six- or eight-month extension of the $14.3 trillion debt ceiling, saying he would not sign such legislation. Instead he said he wanted a deal that would last through the November 2012 elections, the sources said.
With both sides still far apart, the meeting dwelt only with the size of a deal, not policy specifics. A Sunday meeting is to tackle the more difficult question of how those savings can be achieved, congressional aides said.
But as Obama strives for a deficit reduction deal that would clear the way for Congress to increase the $14.3 trillion cap on government borrowing by the deadline, he faces a possible rebellion on the left flank of his own party.
The top Democrat in the House of Representatives, Nancy Pelosi, expressed concern that cuts in popular entitlement programs like the Social Security retirement program and the government-run Medicare program for the elderly might be part of the deficit-reduction deal.
Obama is to meet Pelosi at the White House on Friday.
Obama and U.S. lawmakers are aiming for an agreement that will cut government spending, possibly raise taxes, and restore some semblance of order to U.S. fiscal policy. The U.S. deficit is expected to be $1.4 trillion this year.
The U.S. Treasury has warned it will run out of money to pay all of the country’s bills if the debt ceiling is not increased by Aug. 2.
If negotiators fail to reach a budget agreement by then, the government will default, which could push the United States back into recession and cause turmoil in global financial markets.
Full coverage of U.S. budget and debt [ID:nUSBUDGET]
What’s on the table in U.S. debt talks [ID:nN1E75T1ZR]
In the meeting, Obama outlined three options: the short-term measure he rejected, a second option that would increase the debt ceiling by about $2 trillion and reduce the deficit by the same amount, and a third option of as much as $4 trillion, sources said.
This third option would include all the elements that are the subject of a pitched battle in Washington: Addressing spending in entitlement programs, defense spending and finding new revenues and taxes to lessen the pain of spending cuts.
Briefing reporters after the talks, Obama said both sides still were far apart and that staff negotiators will work through the weekend to find each side’s bottom line.
He said he will have another round of talks with top Democrats and Republicans on Sunday, hoping to begin “the hard bargaining that’s necessary to get a deal done.”
“Everybody acknowledged that there’s going to be pain involved politically on all sides but our biggest obligation is to make sure that we are doing the right thing,” he said.
Pelosi, who was speaker of the House until Democrats lost control of that in elections last Nov. 2, said Democrats feared the poor and elderly would bear the brunt of budget-cutting.
The two sides have discussed changing the way the government measures inflation to restrain the growth of Social Security benefits and tax breaks, an approach that could save roughly $300 billion over 10 years.
“Do not consider Social Security a piggy bank for giving tax cuts to the wealthiest people in our country. We are not going to balance the budget on the backs of seniors, women and people with disabilities,” Pelosi said.
Boehner told Republicans that they should know by the end of the week whether a big agreement is possible. “He said it was maybe 50-50,” said a Republican Party aide.
Normally a routine vote, the debt ceiling has been embroiled in partisan politics, with Republicans seeking to impose deep spending cuts to reduce the budget deficit, which opinion polls show is a major worry for many Americans.
Obama, seeking to avoid angering his liberal base before the 2012 reelection bid, wants tax increases on the wealthy to lessen the pain of spending cuts.
“I want to emphasize that nothing is agreed to until everything is agreed to and the parties are still far apart on a wide range of issues,” Obama said.
Boehner said comprehensive tax reform is on the table and that changes are needed in benefit programs for the poor and elderly to ensure their long-term viability.
“We believe that comprehensive tax reform, both on the corporate side and the personal side, will make America more competitive, help create jobs in our country, and is something that is under discussion,” Boehner said. (Additional reporting by Laura MacInnis, Thomas Ferraro, Matt Spetalnick, Patricia Zengerle, Richard Cowan and Caren Bohan; Editing by Bill Trott and Christopher Wilson)