House Speaker John Boehner hastily rewrote his stalled emergency debt-limit bill yet again Friday as Senate Democratic leader Harry Reid signaled he's ready to push ahead with his own version. President Barack Obama declared "we're almost out of time" in a wrenching political standoff that has heightened fears of a market-rattling government default.
"The power to solve this is in our hands on a day when we've been reminded how fragile the economy already is," the president said from the White House as many U.S. stocks fell in response to a sour report on economic growth and widespread uncertainty over the Washington debt stalemate. "This is one burden we can lift ourselves. We can end it with a simple vote."
A simple vote was hard to come by, just a few days before Tuesday's debt-limit deadline.
On Capitol Hill, Reid pressed forward with his legislation, setting up a showdown vote for Sunday. And Boehner moved to revise his measure in hopes of winning over reluctant rank-and-file conservatives who argue that the deficit cuts it contains are insufficient. The GOP leader pushed toward vote late Friday.
House Republican leaders met behind closed doors with their members in a last-ditch appeal after abruptly postponing a vote that had been expected on Thursday.
Rep. David Dreier of California said the revised measure would still raise the nation's debt limit by $900 billion - essential to allow the government to keep paying its bills - and cut spending by $917 billion. But a later increase in borrowing authority wouldn't take effect unless Congress sent a constitutional balanced budget amendment to the states for ratification.
That was a key demand of rebellious conservatives who withheld their votes from the legislation on Thursday night.
Freshman Rep. Mo Brooks, R-Ala., said the change on the balanced-budget amendment "got a lot of additional Republican votes." At least one switcher was Rep. Jeff Flake of Arizona, who said he would now back the bill.
A divided government is struggling to break the extreme Washington gridlock and head off a first-ever default that would leave the Treasury without the money necessary to pay all its bills. Administration officials say Tuesday is the deadline.
"There are plenty of ways out of this mess. But we are almost out of time," Obama said.
On the Senate floor, Reid said glumly, "This is likely our last chance to save this nation from default."
Reid, D-Nev., said he had invited Senate Minority Leader Mitch McConnell, R-Ky., to join him in negotiations.
"I know the Senate compromise bill Democrats have offered is not perfect in Republicans' eyes. Nor is it perfect for Democrats," Reid said. "But together, we must make it work for all of us. It is the only option."
McConnell dismissed the Democratic effort, arguing that it stands no chance in the GOP-controlled House, and he accused Obama of pushing the nation to the brink of an economic abyss.
"If the president hadn't decided to blow up the bipartisan solution that members of Congress worked so hard to produce last weekend, we'd be voting to end this crisis today," McConnell said on the Senate floor.
Boehner, R-Ohio, suffered a stinging setback Thursday when, for a second day, he had to postpone a vote on his proposal to extend the nation's borrowing authority while cutting federal spending by nearly $1 trillion.
"Obviously, we didn't have the votes," Dreier said after Boehner and the GOP leadership had spent hours trying to corral the support of rebellious conservatives.
If Republicans now can get Boehner's version through the House, a rapid and complex set of choices will determine whether and how a debt crisis can be averted. House Republicans will be under tremendous pressure to pass something, even if they have to make it so appealing to their right wing that the nation's independents and centrists will scorn it. As Thursday's events proved, nothing is guaranteed.
The main area of dispute between the two parties is how to encourage or guarantee big spending cuts in the future without rekindling a fiercely divisive debt-ceiling debate such as the one now raging.
Interviews with well-placed insiders suggest the following road map, assuming Boehner can get his bill out of the House:
The Democratic-controlled Senate would kill it quickly. The focus then would fall on the Senate's two leaders, Reid and McConnell. They must decide whether they can reach a compromise that can pass the Senate - where a united GOP can kill bills with filibusters - and then pass the House and be signed by Obama. The White House would be integral to such talks.
Republican officials say McConnell could hold a strong hand, despite the House's shaky performance. He could argue that the House finally passed a bill to raise the debt ceiling, while the Senate has done nothing but kill that bill. If Tuesday's deadline passes with no resolution, Republicans say, voters will blame Democrats.
Under this thinking, the Senate would pass a measure similar to the House bill, perhaps with minor changes to save face and give political cover to Democrats who vote for it. The House would quickly concur, with numerous Democrats and all but the most conservative Republicans voting aye. Obama would have no choice but to sign it.
Democrats say the opposite is true. Obama has persuasively argued in recent weeks that Republicans are unreasonably demanding, they say.
Democrats control the Senate and White House. If Republicans insist that a partisan, House-passed bill is the only vehicle, then public anger will fall on them, this thinking goes.
The biggest sticking point is the House bill's call for congressional votes to raise the debt ceiling, in two stages, before the 2012 elections.
A $900 billion debt-limit hike would come first, coupled with $917 billion in spending cuts over 10 years. Under the Boehner revision, approval of a balanced-budget constitutional amendment would open a path to another $1.6 trillion in borrowing power, provided that Congress and the president have agreed to another round of spending cuts of that amount or more.
Obama has consistently rejected this condition. He says it would hurt the economy and touch off another ferocious political fight over the debt ceiling, which Congress previously raised with little fuss year after year. Global markets and investors would not be reassured by such a drawn-out, uncertain scenario, he says.
The White House says the prospect of an economically devastating default must not be used as the "trigger" to force Congress to cut the deficit. Such triggers would take effect automatically if Congress did not act on a prescribed deficit-reduction package.
Those could include deep cuts in programs such as Medicare and Medicaid, which would be painful to Democrats, and tax increases that Republicans would be loath to accept. But Republicans believe the threat of default is a much stronger incentive to shrink the deficit.
Presidential adviser David Plouffe told MSNBC on Thursday that the Republican House bill would "have this whole debt ceiling spectacle, three-ring circus ... repeated again a few months from now, over the holidays. You know, the debt ceiling debate would ruin Christmas."
Associated Press writers David Espo, Donna Cassata, Alan Fram, Jim Kuhnhenn, Erica Werner and Ben Feller contributed to this report.
(Copyright 2011 by The Associated Press. All Rights Reserved.)