WASHINGTON, July 30, (AFP): The Republican-led House of Representatives rejected a proposal Saturday from Democratic Senate Majority Leader Harry Reid to avert a US debt default with ruinous global consequences.
Lawmakers voted 173-246 to defeat the measure, amid a frantic beat-the-clock effort in Congress to forge a compromise ahead of a midnight Tuesday deadline by which Washington runs out of cash to pay its bills.
The move came a day after the Democratic-held Senate voted 59-41 to set aside Republican House Speaker John Boehner’s bill for raising the $14.3 trillion debt limit, leaving the two chambers at a stalemate with time running short.
Reid and Democratic House Minority Leader Nancy Pelosi were meet with US President Barack Obama at the White House, according to an Obama aide.

The US economy hit its debt ceiling on May 16 and has used spending and accounting adjustments, as well as higher-than-expected tax receipts, to continue operating normally — but can only do so through Tuesday.
Business and finance leaders have warned that default would send crippling aftershocks through the fragile US economy, still wrestling with stubbornly high unemployment of 9.2 percent in the wake of the 2008 global meltdown.
Absent a deal, the US government will have to cut an estimated 40 cents out of every dollar it spends, forcing grim choices between paying its debt or cutting back on programs like those that help the poor, disabled and elderly.
In a grim warning of what may come if there is no breakthrough by Tuesday, US markets fell for a fifth straight day on Friday — a month of gains wiped out in a week of losses due to poor US growth and the political stalemate.

Talks
The two top Democrats in Congress headed for talks Saturday with President Barack Obama after the House rejected a proposal to avert a US debt default that is just days away, an official said.
Senator Harry Reid, who leads Obama’s party in the Senate, where it enjoys a majority, and House Minority Leader Nancy Pelosi will hold talks at the White House from 3:30 pm (1930 GMT), according to the official.
Obama will meet with the two Democrats “to receive an update on the situation in the House and Senate,” the White House official said on condition of anonymity.
The House, led by the rival Republican Party, voted 173-246 earlier to defeat a proposal by Reid to avert a US debt default.
Without a deal, the US government will run out of cash to pay its bills on midnight Tuesday with potentially devastating consequences for the global economy.
Reid, who survived a tough election battle in November, accused the Tea Party movement in the Republican Party of creating the crisis.

“Ronald Reagan had the debt increased during his eight years as president 18 times,” Reid said, invoking the conservative icon and Republican president who served from 1981-89.
Reagan “didn’t spend even 10 minutes with members of Congress getting the debt ceiling raised. It was not an issue. It’s only becoming an issue with the Tea Party driven republicans,” Reid told reporters before heading to the White House.
The Senate majority leader pointed to Republican efforts to tie a raising of the debt ceiling to an amendment to the US Constitution requiring a balanced budget.
“That’s a little extreme,” Reid said. “We’re happy to have a vote on balanced budget amendments; we’ve had them before.”
Reid also defended his proposal to cut some $1 trillion over the next decade from military spending, noting that the United States was winding down its involvement in Iraq and Afghanistan.
A number of Republican lawmakers have strongly criticized the military cuts, saying that Reid has not provided details or explained the national security implications of cutting back on defense.