With automatic spending cuts set to take affect Friday, President Obama said lawmakers must take action to extend an unrelated "continuing resolution" to fund most government operations beyond the current expiration date.
"Let's be clear: None of this is necessary," Obama told reporters after meeting with congressional leaders at the White House. "It's happening because of a choice that Republicans in Congress have made. We shouldn't be making a series of dumb, arbitrary cuts to things."
Earlier, Obama met with House Speaker John Boehner, Senate Majority Leader Harry Reid, Senate Republican leader Mitch McConnell and House Democratic leader Nancy Pelosi.
On the economic front, the pace of growth in the U.S. manufacturing sector edged up to 54.2 from 53.1 in January, exceeding forecasts for a pullback to 52.5. A reading above 50 signals expansion in manufacturing.
Consumer sentiment was better-than-expected in February at 77.6, according to a survey from Reuters/University of Michigan. Economists polled by Reuters expected the University of Michigan Consumer Sentiment reading to be 76.3.
Meanwhile, construction spending declined by 2.1 percent in January to a seasonally adjusted annual rate of $883.28 billion, according to the Commerce Department, missing expectations for a gain of 0.4 percent, according to a Reuters poll. It was the first monthly decline since March 2012.
And personal income fell more than expected in January, dropping 3.6 percent, missing expectations for a decline of 2.2 percent, while personal spending edged up 0.2 percent.
"We started the year with a lot of uncertainty, but expect moderate improvement in the U.S. economy going forward," said Tanweer Akram, senior economist at ING U.S. Investment Management. "Fundamentals are improving and the downside risk has declined compared to last year, but there are still a number of headwinds."