Debt-limit vote postponed as GOP seeks more votes

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."

Economy may suffer

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.