Debt crisis deepens as House vote postponed

WASHINGTON: US House Speaker John Boehner was forced to delay until Friday a vote on his plan to avert a potentially catastrophic US debt default, as he struggled to wrangles support for the measure from within his restive Republican caucus.

Boehner on Thursday faced stiffer than expected resistance from unruly conservative Tea Party lawmakers to pass the measure and Republicans were expected to wait a day to try again to hold a vote on it.

"No vote tonight," a grim Majority Whip Kevin McCarthy told reporters following a day of heated floor debate and intense intra -party haggling over the controversial measure.

Republicans' futile efforts to keep their own members in line in his party's showdown with President Barack Obama over raising the US debt ceiling have only deepened the crisis over attempts to reach a deal to avert a default by the world's largest economy.

Boehner earlier Thursday met one by one with Republican lawmakers to shore up support for his two-step plan to raise the $14.3 trillion debt ceiling enough to avert default for at least six months.

But Republicans opposed to the measure dug in their heels.

Boehner is "asking for my vote," said Congressman Louie Gohmert of Texas, as he emerged with his limbs intact after one arm-twisting session with the top House Republican.

"I'm still where I was before. I'm still bloodied-and-beaten 'no,'" Gohmert declared.

Meanwhile, markets around the world remained on edge Friday, in fears that a fragile economic recovery nurtured since the 2008 global financial crisis could be at risk if the United States fails to reach a deal to avert a potentially cataclysmic debt default.

Even if the measure does eventually clear the House, Democrats have vowed to block it in the Senate in favour of their own plan, which in turn appeared certain to go down to defeat in the Republican-controlled House.

"We believe still, that in the end, and we're getting near the end, but in the end cooler heads will prevail, sanity will prevail in the United States Congress and they will reach a compromise," White House spokesman Jay Carney said on MSNBC television.

With only five days to go until an August 2 deadline when the Treasury says it will run out of funds, IMF chief Christine Lagarde piled on the pressure for a deal saying the dollar's status could be in doubt if the impasse continues.

Copyright Reuters, 2011