WASHINGTON (AP) -- Crisis concerns rising, House Republican leaders shrugged off a White House veto threat and an outbreak of tensions within their own party Wednesday as they built support for legislation to stave off the government default threatened for next week. Worried Wall Street sent stocks plunging on fears that political gridlock would prevail.
With some politicians talking of economic Armageddon, Americans coast to coast were suddenly focusing on debt and deficit matters that most would have dismissed as arcane until recently. Some lawmakers' offices were inundated with phone calls and emails, many urging some kind of deal to avert the possibility of calamity.
Weary Washington pushed ahead, and there was even some hopeful talk.
"We're getting there," said House Speaker John Boehner of Ohio, one day ahead of a scheduled vote on his GOP bill to cut trillions in federal spending in exchange for increasing the debt limit the government will collide with next Tuesday.
The While House disparaged the bill Republicans were working so hard to pass, and Senate Majority Leader Harry Reid of Nevada was even more emphatic. "A big wet kiss for the right wing," he called it.
The White House has threatened a veto, saying the bill does not meet President Barack Obama's demand for an increase in the debt limit large enough to prevent a rerun of the current crisis next year, in the heat of the 2012 election campaign.
Instead, Obama supports an alternative drafted by Reid that also cuts spending yet provides enough additional borrowing authority to tide the government over through 2012.
For all the bluster, there were hints that a compromise might be near.
"Magic things can happen here in Congress in a very short period of time under the right circumstances," Reid told reporters.
Without legislation in place by Aug. 2, administration officials say the Treasury will not be able to pay all the nation's bills, possibly triggering a default that could prove catastrophic for an economy still recovering from the worst recession in decades.
The U.S. financial markets posted big losses for the day as the nation's political leaders maneuvered. The Dow Jones industrial average fell nearly 200 points and appeared headed for its worst week in nearly a year.
"Confidence in our political system is beginning to fade." said Channing Smith, managing director of Capital Advisors Inc. "As hours pass and the uncertainty builds, I think the market is starting to price in the potential that we might not have a solution by Aug. 2."
And it wasn't just market pros.
Shawn Bonner of Boerne, Texas, said, "I don't think the people who are making the decisions live in the same environment we do." She said of the two sides: "They've both dug in their heels for political statements, and we need them to make decisions to help the country." She was in Tennessee, touring the State Capitol.
In Washington, the rival Republican and Democratic pieces of legislation underwent revisions to increase their prospects of passage.
While they differed in key details, they also shared similarities that underscored the concessions made by the two sides in recent days. Reid's bill does not envision a tax increase to reduce deficits, a bow to Republicans. But neither does the House measure require both houses to approve a constitutional balanced budget amendment for state ratification, a step in the direction of Obama and the Democrats.
For Boehner and other Republican leaders, passage of their legislation by the House was imperative to maximize their leverage with Obama and Reid in a fast-approaching endgame.
The speaker was blunt in the meeting with rank-and-file GOP lawmakers on Wednesday. "Get your ass in line," he told them. "I can't do this job unless you're behind me."
If House conservatives torpedo the bill, any follow-up would probably require Democratic votes to pass. That, in turn, would mean smaller spending cuts than Republicans are seeking in exchange for raising the nation's $14.3 trillion debt limit.
As Wednesday's vote approached, some Republicans seemed to be swinging behind the legislation, however reluctantly.
"Rep. Bill Huizenga, a first-term lawmaker from Michigan, said he was undecided how to vote, but he added, "This is about as good as it's going to get. That's a pretty strong argument."
"Nancy Pelosi, Harry Reid and President Obama are going to be surprised tomorrow night," said Rep. Allen West, a Florida first-term Republican. "I'll bet my retirement check on it. I'm a conservative. I'm going to support this."
There was strong opposition from some lawmakers, though.
"I don't know where the votes are today," said Rep. Jim Jordan, R-Ohio, a leader of the Republican Study Committee, an organization of conservative Republican lawmakers who often have disagreed with the leadership. "I just know that I am against the bill."
But Jordan felt obliged to open a closed-door meeting of the GOP rank and file during the day by apologizing for the actions of two aides. Officials said one sent an email to outside organizations suggesting they lobby some RSC members who were wavering on the debt limit bill. A second aide recounted details of an earlier GOP closed-door meeting in an email he had sent.
As Rep. Greg Walden, R-Ore., read one of the emails aloud, there were scattered calls to "fire him," referring to the aide responsible. The officials who described the events did so on condition of anonymity, saying they were not authorized to disclose details from a closed-door meeting.
Across the Capitol, Reid played a waiting game, scheduling no votes until Boehner could show he could prevail in the House.
The White House rejected one proposed way out of the crisis.
Democratic Rep. Jim Clyburn suggested the president unilaterally raise the debt limit, citing a clause in the 14th Amendment to the Constitution that says the validity of the nation's public debt "shall not be questioned."
Obama said several days ago he had consulted with White House lawyers on that point and they were unenthusiastic about the idea.
At the White House, Carney was dismissive of the suggestion. "There are no off-ramps. There is no way around this. There is no escape," he said."
Pending revisions, the Congressional Budget Office said the House legislation would cut deficits by about $850 billion over 10 years, short of a promised $1.2 trillion, while allowing a $900 billion increase in borrowing authority.
Equally troublesome among the rank and file, it would generate just a $1 billion deficit cut in the first year after it was implemented.
A second, $1.6 trillion increase in borrowing authority would depend on Congress' ability to make additional cuts of at least $1.8 trillion later this year or in 2012.
Reid countered with a measure that budget analysts said would cut a little more than $2 trillion, a half-trillion less than promised, while raising the debt limit by $2.7 trillion.
To the irritation of Republicans, about $1 trillion of his savings would come from assumptions that the wars in Iraq and Afghanistan would soon wind down, resulting in smaller-than-expected Pentagon budget needs.
Associated Press writers Alan Fram, Jim Abrams, Laurie Kellman, Stephen Ohlemacher, Donna Cassata, Nancy Benac, Ben Feller, Jim Kuhnhenn and Erica Werner contributed to this report.
