"We're obviously in a better place than we were a few days ago in terms of the constructive approach we've seen," White House spokesman Jay Carney said Friday after a series of meetings this week between Obama and lawmakers of both parties.
Obama and John Boehner, Speaker of the Republican controlled House, spoke on the phone on Friday afternoon after a meeting with Senate Republicans at the White House Friday following one with House Republicans Thursday.
"The two of them agreed all sides need to keep talking on the issues here that ... have lead to the shutdown of the government and the situation that has put us on the precipice of potential default," Carney said.
Despite the absence of a deal, the New York Times said "political divisions over the nation's finances appeared to narrow" as "Obama and Congressional Republicans showed greater flexibility in their negotiations.
The Washington Post said Congressional Republicans were scrambling to develop a new plan for reopening the government and avoiding a first-ever default after Obama rejected Boehner's offer to raise the debt limit through late November in return for talks on a broader budget deal.
Obama reiterated that ongoing budget negotiations could and would cover all potential Republican concerns -- but only after the default and shutdown issues were resolved.
Obama "appreciates the constructive nature of the conversation and the proposal that House Republicans put forward", Carney said. However, "he has some concerns with it".
Democrats and Republicans have yet to reach a deal on how to end the government.
"The president's position that we the US should not, and the American people cannot, pay a ransom in exchange for Congress doing its job remains as true today as it has throughout this period," he said.
Meanwhile, the finance ministers and central bankers of the Group of 20 world's largest economies pressed the US to head off a potentially devastating default.
The US "needs to take urgent action to address short-term fiscal uncertainties", the group, which accounts for 90 percent of world output and two-thirds of its population, said a communiqué issued at the end of a meeting here.
Solving the impasse is crucial for a global economy which is showing signs of improvement but still facing "downside risks," the G20 said.