Obama cranks up charm offensive

President Barack Obama will take his charm offensive with Republicans up a notch on Thursday, having lunch with budget hawk and former vice presidential candidate Paul Ryan at the White House.

Hours after supping with a dozen Republican senators to start a dialogue aimed at reviving a stalled "grand bargain" on the deficit and spending, the president will welcome Ryan, a key player in the House of Representatives.

Chris Van Hollen, Ryan's Democratic opposite number on the House Budget Committee, will also join the lunch, a White House official said, as Obama's fresh strategy of reaching out to Republicans gathered pace.

Ryan, who was vice presidential nominee for Obama's defeated Republican rival Mitt Romney in November, is regarded as the intellectual engine of fiscal conservatism in the House and writes Republican Party budget policy.

Obama is making a new attempt to find common ground with Republican foes on Capitol Hill following a string of ugly tax and spending confrontations driven by sharply clashing ideologies between him and his political foes.

His new strategy is unfolding days after the latest impasse resulted in the imposition of an $85 billion austerity drive which threatens US growth and could hike unemployment.

White House officials believe there is a small window to test whether a deal to rein in the US budget deficit may be possible in Obama's second term.

On Wednesday night, Obama treated a dozen senior Republicans to dinner at the Jefferson Hotel, a few blocks north of the White House, in an unusual moment of comity in a US capital paralyzed by partisanship.

Republican Senator Lindsey Graham, often a vocal Obama critic, helped organize the dinner which also included luminaries John McCain, Kelly Ayotte, Pat Toomey, Bob Corker and Tom Coburn.

Graham said the dinner was "productive and substantive" and expressed hope it will mark a "new, long-overdue paradigm where people in elected office actually begin talking to each other about meaningful issues."

"I shared with my colleagues there is no dishonor in trying and failing to solve big problems.

"I'm ready to try to solve the serious, long-term budget problems our country faces and can accept failure as an outcome. But I cannot accept not trying."

Next week, Obama, a Democrat, will take his case directly to Capitol Hill and will speak to Republicans from the Senate minority and the majority in the House of Representatives.

Though Republicans are publicly welcomed signs of Obama's outreach, the differences between the two sides remain deep.

After securing higher tax rates for the wealthy last year, Obama wants to raise revenues through closing tax loopholes used by the rich and corporations to combine with reductions in spending to reduce the deficit.

Many Republicans however warn that they will not permit any tax increases.

The question now is whether Republicans could be persuaded to raise more revenue in a large deal encompassing reforms to entitlement social programs dear to Democrats or in a sweeping reform of the tax code.

House Republican Speaker John Boehner, with whom the president has cool relations after several failed attempts to reach such a "grand bargain," gave a tepid welcome to Obama's turn in strategy.

"It was really kind of interesting that this week we've gone 180. Now after being in office now over four years, he's actually going to sit down and talk to members," Boehner said.

"I think it's a sign, a hopeful sign, and I'm hopeful that something will come out of it. But if the President continues to insist on tax hikes, I don't think we're going to get very far."