With just a week to go until the Treasury says the federal government will run out of money to pay all of its bills, House Republicans are scrambling to rewrite a deficit-reduction bill pushed by Speaker John Boehner that failed to garner any significant support in either political party.
The rewrite came one day before the House was set to vote on the legislation, which sought to cut $1.2 trillion in spending over the next decade. But the nonpartisan Congressional Budget Office said Tuesday that the package would cut less than $1 trillion.
"We're here to change Washington -- no more smoke-and-mirrors, no more 'phantom cuts.' We promised that we will cut spending more than we increase the debt limit -- with no tax hikes -- and we will keep that promise," Boehner spokesman Michael Steel said.
"As we speak, congressional staff are looking at options to re-write the legislation to meet our pledge," Steel said. "This is what can happen when you have an actual plan and submit it for independent review -- which the Democrats who run Washington have refused to do."
House conservatives refused to throw their support behind Boehner's bill, and a source told Fox News that there were no House Democrats who would vote for it. House Republican leaders were very worried about putting the bill on the floor Wednesday and seeing it fail or being forced to yank it while the stock markets were open, possibly triggering a repeat of the steep market drop after the first Wall Street bailout vote failed in 2008, the source said.
Republicans say they are rewriting the bill to develop more savings than what the CBO projected, and it won't be considered on the House floor until Thursday at the earliest. But the source said they are rewriting it because they lack the votes to pass it.
Republicans have only two options for a rewrite -- they can lower the debt-ceiling increase (which means it would need a further increase before the spring 2012 mark initially discussed) or they could enhance the number of cuts.
Earlier Tuesday, Senate Majority Leader Harry Reid warned that the bill is "dead on arrival" in his chamber, as the Obama administration issued a formal veto threat and pushed lawmakers to reach a "compromise."
Republican leaders had their own caucus to deal with, too, as conservatives voiced concerns about the bill proposed by Boehner.
"As of this morning, I'm confident there's not 218 Republicans in support of the plan," said Rep. Jim Jordan, R-Ohio. The coalition of more than 100 House Republicans who supported the so-called "Cut, Cap and Balance" legislation also came out against the package Tuesday afternoon, in a blow to the speaker.
However, a senior administration official told Fox News that the latest expectation is that should the House pass legislation and send it to the Senate, Senate Democratic leaders will plug in some semblance of a compromise bill, where it could get a final vote before being kicked back to the House.
Gene Sperling, head of the president's National Economic Council, made clear that the White House does not expect to be faced with a veto decision on the current House bill. Sperling said Tuesday that both parties' bills, in their current form, will probably face "stalemate."
"Neither are likely to pass both houses," he said. Sperling said negotiators are still "very close to a bipartisan deal."
White House Press Secretary Jay Carney warned of "enormous" consequences if Congress does not raise the debt ceiling by Aug. 2. White House budget director Jack Lew also told Fox News that Aug. 2 is a "very real" deadline. "No one should assume there's room beyond that," Lew said.
But House Republican Leader Eric Cantor said Tuesday that, with no formal plan out of the White House, Congress has only three options -- miss the Aug. 2 deadline and risk the possibility of default, pass the Democratic plan drafted by Senate Majority Leader Harry Reid or pass the House GOP plan.
If a debt deal doesn't get done, a colossal number of payments -- to seniors, veterans and others -- could be in jeopardy, according to the administration.
Poll numbers suggest Americans would not be forgiving to either party should the current standoff end up harming the already-fragile economic recovery. A new Washington Post-ABC News poll showed about as many people fault GOP policies for the economy as they do the president's.
The survey showed 65 percent of those polled disapprove of the Republicans' performance on jobs, while 52 percent feel the same about Obama.