Updated: 10:33 p.m.

In what could be the last debt limit meeting between Congressional leaders and President Barack Obama at the White House, the president pressed lawmakers Thursday to reach a deal among themselves in the next 36 hours.

“It’s decision time,” Obama told the bipartisan leadership, according to a Democratic official familiar with the talks. “We need concrete plans to move this forward.”

Standard & Poor’s, meanwhile, jolted the debate by warning that it was likely to downgrade the federal debt from a AAA rating within three months, even if the debt ceiling is raised. S&P cited the growing political stalemate in Washington but said a $4 trillion package of deficit reduction over the next 10 to 12 years would likely lead it to reaffirm the AAA rating. Moody’s Investors Service announced the day before that it was also mulling a credit rating downgrade.

After five consecutive days of meetings, the Congressional leaders and administration officials are not scheduled to reconvene Friday. Obama instead suggested at the “very cordial” meeting that the leaders take the group’s proposals to their respective caucuses and try to iron out a deal. If they don’t reach agreement in the next 24 to 36 hours, Obama warned that he may call for another meeting this weekend, the source said.

Obama scheduled a news conference for 11 a.m. Friday, his second this week.

A Republican source also described the afternoon meeting as “composed and polite,” a sharp contrast to the contretemps between Obama and House Majority Leader Eric Cantor the previous day. The Virginia Republican didn’t even speak at Thursday’s gathering, according to Democratic aides.

Obama reiterated that he wants the largest possible deal, with spending cuts, entitlement reforms and savings in the tax code. But he said that if a larger package is not possible, a $2 trillion deal is within reach if all sides give a little.

A third option would be a significantly smaller deficit reduction package with a long-term increase in the debt limit.

Obama again insisted that he would not sign a short-term deal, arguing that it would make dealing with the issues harder and risk an adverse reaction in the markets, said the Democratic official familiar with the talks.

Senate Minority Leader Mitch McConnell (R-Ky.) told reporters that they had a good meeting and that discussions would continue. The group did not discuss a fallback plan that he is crafting with Senate Majority Leader Harry Reid (D-Nev.) to give the president the power to raise the debt ceiling, McConnell said.

Obama continues to resist a significant package of spending cuts without tax increases, the Senate Minority Leader said on “The Hugh Hewitt Show,” adding that there’s no support among Republicans in the House or Senate for that approach.

The fallback proposal would include a joint deficit reduction committee, not a commission, that would tackle entitlements and be empowered to expedite floor votes, McConnell said. The committee would be evenly divided among Democrats and Republicans and would be required to reach a result by the end of the year.

The Minority Leader added that he hopes to add to his fallback plan whatever cuts that Republicans and the White House can agree to.

The White House outlined several of its proposals Thursday, sources said.
 
The Democratic official familiar with the negotiations said the administration discussed extending and possibly expanding the payroll tax cut, as well as extending unemployment insurance. A Democratic aide said Obama identified “a wide array of special interest tax loopholes” that could be eliminated to pay for the payroll tax cut, including those for corporate jets, ethanol, and oil and gas companies. However, Republicans rejected all of them.
 
A GOP aide said the administration also discussed setting deficit caps that would trigger automatic tax increases if they were breached.

Treasury Secretary Timothy Geithner warned the group that the world financial markets want both an increase in the debt ceiling and a plan to deal with the deficit, according to the Republican source.

“The Speaker used that warning to reiterate his concern that nothing the administration is offering to this point will resolve our debt problem,” the source said.