Debt-limit vote postponed as GOP seeks support

WASHINGTON - The endgame at hand, House Republicans struggled Thursday to pass legislation to prevent a looming government default while slicing nearly $1 trillion from federal spending. Senate Democrats pledged to scuttle the bill - if the GOP could get it through the House - in hopes of forcing a final compromise.

As afternoon debate headed toward evening, GOP leaders ordered an unexplained halt on the measure as Speaker John Boehner summoned a string of recalcitrant rank-and-file Re(publicans to his office.

Asked what he and Boehner had talked about, Rep. Jeff Flake, R-Ariz., said, "I think that's rather obvious. .. There's negotiations going on."

It wasn't clear how long the delay might last, although a spokesman for Boehner said the vote was still expected to take place later in the evening.

The White House quickly taunted Boehner's Republicans.

"Clock ticks towards August 2, House is naming post offices, while leaders twist arms for a pointless vote. No wonder people hate Washington," White House Communications Director Dan Pfeiffer tweeted.

Earlier, Boehner had exuded optimism.

"Let's pass this bill and end the crisis," said the president's principal Republican antagonist in a new and contentious era of divided government. "It raises the debt limit and cuts government spending by a larger amount."

President Barack Obama has threatened to veto the measure, and in debate on the House floor, Rep. Debbie Wasserman Schultz of Florida savaged it as a "Republican plan for default." She said the GOP hoped to "hold our economy hostage while forcing an ideological agenda" on the country.

Despite the sharp rhetoric, there were signs that gridlock might be giving way.

"Around here you've got to have deadlock before you have breakthrough," said Sen. Kent Conrad, D-N.D. "We're at that stage now."

Wall Street suffered fresh losses as Congress struggled to break its long gridlock. The Dow Jones industrial average was down for a fifth straight session.

The Treasury Department moved ahead with plans to hold its regular weekly auction of three-month and six-month securities on Monday. Yet officials offered no information on what steps would be taken if Congress failed to raise the nation's $14.3 trillion debt limit by the following day.

Without signed legislation by Aug. 2, the Treasury will not have enough funds to pay all the nation's bills. Administration officials have warned of potentially calamitous effects on the economy if that happens - a spike in interest rates, a plunge in stock markets and a tightening in the job market in a nation already struggling with unemployment over 9 percent.

White House press secretary Jay Carney outlined White House compromise terms: "significant deficit reduction, a mechanism by which Congress would take on the tough issues of tax reform and entitlement reform and a lifting of the debt ceiling beyond ... into 2013."

The last point loomed as the biggest obstacle.

The House bill cuts spending by $917 billion over a decade, principally by holding down costs for hundreds of government programs ranging from the Park Service to the Agriculture Department and foreign aid.

It also provides an immediate debt limit increase of $900 billion, which is less than half of the total needed to meet Obama's insistence that there be no replay of the current crisis in the heat of the 2012 election campaigns.

An additional $1.6 trillion in borrowing authority would be conditioned on passage of at least $1.8 trillion in further savings to be recommended by a newly created committee of lawmakers.

Those deficit reductions would presumably come from cuts to benefit programs such as Social Security and Medicare, as well as an overhaul of the tax code generating additional government revenue.

The GOP bill's $917 billion in upfront spending cuts was trillions less than many tea party-backed rank-and-file Republican lawmakers wanted, but a total that seemed nearly unimaginable when they took power in the House last winter with an agenda of reining in government. Numerous Republicans grumbled that the legislation didn't cut more deeply, and Boehner and the rest of the GOP leadership have spent their week cajoling reluctant conservatives to provide the votes needed to pass it.

By most accounts, they were succeeding.

"It gives us a little bit of heartburn because it doesn't go big enough," said Rep. Sean Duffy, R-Wis., a first-term lawmaker who said he would vote for the bill as the best one available.

Another first-term Republican, Rep. Martha Roby of Alabama, said the bill was "far from perfect. But I don't have the luxury of writing the plan by myself, and neither does Speaker Boehner."

While the White House and Democrats objected to the House bill, they readied an alternative that contained similarities.

Drafted by Senate Majority Leader Harry Reid, it provides for $2.7 trillion in additional borrowing authority for the Treasury. It also calls for cuts of $2.2 trillion, including about $1 trillion in Pentagon savings that assume the end of the wars in Iraq and Afghanistan.

Even before the House voted, Reid served notice he would stage a vote to kill the legislation almost instantly.

"No Democrat will vote for a short-term Band-Aid that would put our economy at risk and put the nation back in this untenable situation a few short months from now," he said.

With the House and Senate focused on debt-limit legislation at opposite ends of the Capitol, eleven religious leaders protesting budget cuts were arrested in the Rotunda midway between the two chambers.

Democratic Rep. Chellie Pingree of Maine said on the House floor that they were praying for those who will be "hurt the hardest" by the bill being considered.

Rep. David Dreier, R-Calif., countered that he, too was praying - to avoid a default.

The day's events marked the climax of a struggle that began last winter, when the Treasury Department notified Congress it would need additional borrowing authority, and Boehner said any increase would have to include steps to reduce future spending.

At first the White House balked at the terms, then relented. That gradually morphed into a series of bipartisan negotiations, one led by Vice President Joe Biden, then another by Obama, and finally, a round of golf that led to stab at a "grand bargain" between the president and Boehner.

Boehner announced last Friday he was calling off the talks, setting in motion a frantic week of maneuvering as the default deadline grew near.

--- Associated Press writers Andrew Taylor, Donna Cassata, Stephen Ohlemacher, Larry Margasak, Martin Crutsinger, Charles Babington, Darlene Superville and Jim Kuhnhenn contributed to this report.

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