Obama says time running out to avoid U.S. default

07/29/11) WASHINGTON (AP) - Partisan to the core, Congress groped uncertainly Friday for a way to avoid a government default threatened for early next week. "We are almost out of time," warned President Barack Obama as U.S. financial markets trembled.

At one end of the Capitol, Speaker John Boehner and House Republicans pushed toward a vote on veto-threatened legislation rewritten overnight to win the support of conservative holdouts. The conservatives wanted a balanced-budget amendment to the Constitution, and it was added to Boehner's bill.

At the same time, Democratic Senate Majority Leader Harry Reid worked on an alternative bill to cut spending by $2.2 trillion and raise the debt limit by $2.7 trillion. That would be enough to meet Obama's terms that it tide the Treasury over until 2013.

The final result - Obama and Reid pressed for compromise as the deadline drew near - was anything but certain.

Boehner's measure would provide a quick $900 billion increase in borrowing authority - essential for the U.S. to keep paying all its bills after next Tuesday - and $917 billion in spending cuts. After the bill's latest alteration, any future increases in the debt limit would be contingent on Congress approving the constitutional amendment and sending it to the states for ratification.

The White House called the bill a non-starter. "'Amend the Constitution or default' is a highly dangerous game to play," said press secretary Jay Carney, and Democrats said they would scuttle it as soon as it arrived in the Senate.

Clock ticking toward debt deadline

Vote on US debt crisis postponed

Obama pushing for deal on raising debt ceilingDebt showdown continues in Washington

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