The federal government has five days left to raise the nation's current $14.3 trillion debt ceiling, the Treasury Department said. A failure to do so will risk an unprecedented national default.
If the debt ceiling is not raised by August 2, Americans could face rising interest rates and a declining dollar, among other problems.
As the cost of borrowing rises, individual mortgages, car loans and student loans could become significantly more expensive. Some financial experts have warned of a downgrade of America's triple-A credit rating and a potential stock market crash.
Without an increase in the debt limit, the federal government will not be able to pay all of its bills next month. President Barack Obama recently indicated he can't guarantee Social Security checks will be mailed out on time. Other critical government programs could be endangered as well.
There will be no vote Thursday night by the U.S. House on Speaker John Boehner's latest proposal to increase the debt ceiling and cut government spending, House Majority Whip Kevin McCarthy said.
Earlier Thursday, House Republicans delayed a vote scheduled for 6 p.m. on Speaker John Boehner's latest debt ceiling proposal, saying it could take place later in the evening, the chamber's second-ranking Democrat said. The move indicated possible difficulty in lining up sufficient Republican support to pass the measure.
Assuming House Democrats remain united against the plan, Boehner will need the support of at least 217 of the House's 240 Republicans to pass it. All 53 Senate Democrats have promised to oppose the plan if it is passes the House.
Boehner's plan calls for $917 billion in savings over the next decade, while creating a special congressional committee to recommend additional savings of $1.6 trillion or more. It would allow the debt ceiling to be increased by a total of roughly $2.5 trillion through two separate votes. The $2.5 trillion total would be enough to fund the federal government through the end of 2012.
The plan also calls for a congressional vote on a balanced budget amendment to the Constitution by the end of the year.
Senate Majority Leader Harry Reid's plan would reduce federal deficits over the next decade by at least $2.2 trillion while raising the debt ceiling by $2.7 trillion. Reid has promised additional cuts will be included in the final version of his legislation - enough to meet the GOP's demand that total savings should at least equal any total debt ceiling hike.
Reid's plan would cut spending by $1.8 trillion. Roughly $1 trillion in the savings are based on the planned U.S. withdrawals from military engagements in Afghanistan and Iraq.
Reid's plan also would establish a congressional committee made up of 12 House and Senate members to consider additional options for debt reduction. The committee's proposals would be guaranteed a Senate vote with no amendments by the end of this year.
Obama has endorsed Reid's plan and threatened a veto of Boehner's plan. The president strongly opposes any bill that doesn't raise the debt ceiling through the 2012 election. Obama has promised to veto any short-term debt ceiling extension unless it paves the way for a "grand bargain" of more sweeping reforms and revenue increases.
The president made a nationally televised plea for compromise Monday night, though he also criticized Republicans for opposing any tax hikes on the wealthy.
"This is no way to run the greatest country on Earth," the president said. "The American people may have voted for divided government, but they didn't vote for a dysfunctional government."