"It would be bad for the economy, it would be bad for those families, in fact it would be bad for the world economy," Obama told reporters at the White House as he met with his cabinet.

Obama and congressional leaders are negotiating over how to avoid approximately $600 billion in tax hikes and spending cuts that would begin in 2013 and that analysts say would push the US economy back into recession.

The president has proposed maintaining existing tax rates for all but the top two income tax brackets, but congressional Republicans are opposed to any tax increases.