US President Barack Obama has rejected a Republican proposal to resolve a looming fiscal crisis as "still out of balance". He said any deal must include a rise in income tax rates on the wealthiest Americans.

Obama said the Republicans' reliance on eliminating tax deductions instead of letting taxes rise on Americans, making more than 250,000 US dollars a year. And this would not raise enough money to fund the government.

Obama pledged to work with House of Representatives Speaker John Boehner, the top Republican in Congress, to go after what he called excessive healthcare costs in the budget. But he said a deal was not possible without raising tax rates on the wealthy.