House Speaker John Boehner said the measure to allow the US to borrow money would advance if Obama agrees to negotiate over reopening the government and begins to deal with America's pressing problems.
"Listen, it's time for leadership," Boehner said after meeting his Republican party colleagues.
"What we have discussed as a conference is a temporary extension of the debt ceiling. In exchange for a real commitment by this president and the Senate majority leader to sit down and talk about the pressing problems that are facing all the American people. That includes a broad array of issues," he said.
Responding to the planned offer to Obama, White House spokesman Jay Carney said, "The president is happy that cooler heads at least seem to be prevailing in the House, that there at least seems to be a recognition that default is not an option."
But Carney did not guarantee that Obama would sign the short-term debt limit deal offered by Republicans, saying the White House had seen no details of the plan
"We will see what the House Republicans propose, we will see that they are able to pass and consider it then," Carney said.
Obama, who cancelled his 10-day trip to Asia to stay in the White House and resolve the current political impasse over the budget with the Republicans, yesterday held talks with lawmakers from his own Democratic party for over an hour.
During the meeting, he told lawmakers that he would negotiate with the Republicans but "not with a gun at my head".
The meeting comes as the US lurches close to an October 17 deadline to raise the government's statutory borrowing limit. Republicans said the debt default deadline could be extended till November 22 under their offer to Obama.
The government has been shut for nine days after lawmakers failed to pass a spending plan for the new fiscal year that started on October 1. Obama is scheduled to meet the lawmakers from Republican Party at the White House tomorrow.
Meanwhile, Treasury Secretary Jack Lew warned lawmakers that a US debt default would have dramatic economic repercussions and be "deeply damaging" to financial markets.
"If Congress fails to meet its responsibility, it could be deeply damaging to the financial markets, the ongoing economic recovery, and the jobs and savings of millions of Americans," Lew told the Senate Finance Committee.