He is pushing for another short-term solution to the budget battles that have troubled Washington for months and still threaten the struggling US economy.
The president is asking Congress to delay automatic across-the-board cuts earmarked for March 1.
Some conservative Republicans in Congress are gearing up to let the sharp automatic cuts take effect – which some economists say would create another recession.
But Mr Obama called for spending cuts that would stave off the impending austerity measures.
The automatic cuts, which would hit everything from defence spending to popular benefit programmes, were supposed to take effect on January 1.
But the president and congressional Republicans struck a dramatic New Year’s Day deal that extended Bush-era tax cuts for all but the wealthiest Americans and put in place about $24bn (£15.5bn) in deficit reduction.
That delay effectively postponed the automatic reductions to March 1.
The automatic austerity measures are punishment for Washington’s failure to strike a long-term budget pact. The total US debt has grown to more than $16 trillion (£10.3 trillion).
Mr Obama has said he is willing to see some cuts in the social safety net that protects older Americans.
“This doesn’t have to happen,” he said of the dramatic across-the-board cuts looming next month.
He added that there should be no reason for the “self-inflicted wounds”, job losses and hits to already weak economic growth “just because folks in Washington” could not come up with a plan to reform government spending and close loopholes in income tax laws.
If the automatic cuts do kick in on March 1, they would reduce Pentagon spending by seven per cent and domestic programmes by five per cent.
While taking a huge bite out of the economy, the cuts would inevitably lead to job losses at a time when unemployment is still at 7.9 per cent, five years after the financial crisis that sent the US into its deepest downturn since the Great Depression of the 1930s.