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

WASHINGTON - (AP) - Partisan to the core, Congress gropeduncertainly Friday for a way to avoid a government defaultthreatened 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 HouseRepublicans pushed toward a vote on veto-threatened legislationrewritten overnight to win the support of conservative holdouts.The conservatives wanted a balanced-budget amendment to theConstitution, and it was added to Boehner's bill. At the same time, Democratic Senate Majority Leader Harry Reidworked on an alternative bill to cut spending by $2.2 trillion andraise the debt limit by $2.7 trillion. That would be enough to meetObama's terms that it tide the Treasury over until 2013. The final result - Obama and Reid pressed for compromise as thedeadline drew near - was anything but certain. Boehner's measure would provide a quick $900 billion increase inborrowing authority - essential for the U.S. to keep paying all itsbills after next Tuesday - and $917 billion in spending cuts. Afterthe bill's latest alteration, any future increases in the debtlimit would be contingent on Congress approving the constitutionalamendment and sending it to the states for ratification. The White House called the bill a non-starter. "'Amend theConstitution or default' is a highly dangerous game to play," saidpress secretary Jay Carney, and Democrats said they would scuttleit as soon as it arrived in the Senate.

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