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Obama: Any debt solution must be bipartisan

/ Source: staff and news service reports

As the Republican-led House and Democratic-led Senate push ahead with separate measures to avert a calamitous U.S. default next week, President Barack Obama once again urged compromise in the stalled negotiations.

"Any solution must be bipartisan," said Obama from the Diplomatic Room at the White House. "We're in rough agreement," said the president. "There are plenty of ways out of this mess."

"The time for putting 'party' first is over," he added. "It’s time to step up and show the leadership the American people expect."

During his address, president said he was ready to work with top Democrats and Republicans through the weekend to get a debt ceiling accord.

Obama warned that the nation is in danger of losing its top credit rating, and once again asked voters to pressure Congress to act.

On the heels of his comments, Capitol Hill staffers received notice that House telephone circuits are near capacity, resulting in outside callers occasionally getting busy signals.

He later reiterated his call to action on Twitter: "The time for putting party first is over. If you want to see a bipartisan #compromise, let Congress know. Call. Email.Tweet. --BO"

Republican House Speaker John Boehner failed to round up enough support for his plan Thursday evening, exposing  a rift in the Republican Party that is hampering efforts to raise the debt ceiling before a deadline Tuesday.

Shortly after the president's speech, GOP lawmakers announced plans to tweak the House bill with hopes of gaining the votes needed for passage.

According to NBC News, the legislation is slated for a vote between 5:45 p.m. ET and 6:00 p.m. ET.

Even if it passes the House, the legislation is likely doomed in the Senate.

Rep. David Dreier says the updated measure will still raise the country's borrowing authority by $900 billion and cut spending by $917 billion. But a second increase in the debt limit wouldn't take effect unless Congress sends 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.

An aide who attended Boehner's meeting with the GOP conference told NBC News, "If we pass this today, we will have sent not one, but two bills to the Senate that would end this crisis. All that will stand between the American people and a resolution to this crisis will be the Senate, which has passed nothing."

In the upper chamber, Democratic Majority Leader Harry Reid pledged to move forward with his own proposal.

Speaking to reporters Friday afternoon, he called the House bill "right-wing leaning," and said his caucus woud not support a short-term deal. He asked for Republicans to make suggestions to improve his legislation.

"This is the last chance to save the nation from default," Reid said earlier on the Senate floor. "Though the House of Representatives have not yet voted, that plan is flawed, that's why they've struggled for days to pass this inadequate legislation."

Reid has until 11:59 p.m. ET Friday to file cloture on his bill — so, the earliest the Senate could vote to file cloture is 1 a.m. ET Sunday. That sets up a final vote on Monday morning to send the legislation to the House.

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 Republican' 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."

But McConnell dismissed the Democratic effort, arguing that it stands no chance in the Republican-controlled House, and he accused Obama of pushing the nation to the brink of an economic abyss.  

Reid's spokesman, Adam Jentleson, responded to Republicans' plan to update the House legislation Friday by tweeting, "Desperate House Republicans added a Tea Party poison pill to their bill. The Tea Party is still leading Boehner around by the nose."

Concerns about a U.S. default on Aug. 2 continued to reverberate around markets Friday, with stocks down again. While investors have been jittery for weeks, the inability this week of Republicans to even manage to get their own party to agree on a plan has reinforced those fears with just days to go.

If Republicans fail to pass the vote Friday, then Obama and Senate Democrats will have extensive leverage to shape a bill to their liking and practically dare the House to reject it and send the nation into default. The dissent among Republicans has mostly been coming from those in the low-tax, small-government tea party faction who do not believe Boehner's bill cuts spending sufficiently.

If, however, Republicans 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 not support it.

If the Republican-led House does pass a bill that the Democrat-majority Senate again rejects, Republicans could argue that the House did its job, while the Senate has done nothing but kill its bills. Democrats say that if Republicans insist that a partisan, House-passed bill is the only vehicle, then public anger will fall on Republicans.

Some analysts believe that even if U.S. lawmakers do come up with a deal in time, ratings agencies could still downgrade U.S. debt — which would push borrowing costs up and make it more difficult for Congress to reduce the amount of money the government owes.

Obama, like Senate Democrats, has rejected any proposal that would come up with a short-term debt limit increase and bring the issue up again before the 2012 elections, saying it would lead to more political wrangling.