"We are confident" that the United States will find a "long-term solution" on its budget "as they have done in the past," government spokesman Georg Streiter told a regular news briefing.

Obama cut short his Christmas break this week to fly back to Washington to revive last-ditch talks on the budget.

If he and Republican lawmakers cannot clinch an agreement on how to tackle the US's ballooning deficit, tax cuts enacted under former president George W. Bush will expire on January 1 and huge automatic spending cuts will then take effect as well, likely throwing the world's leading economy into recession.