Obama Urges Action to Avert Economic 'Catastrophe,' Decries 'Tired Arguments'

President Obama issued Democrats a call to action on the economy Thursday night, pushing his plan for a mix of spending and tax relief while accusing some of the bill's critics of "phony arguments and petty politics."

Obama was speaking to partisan crowd of House Democrats at a retreat in Williamsburg, Va., and while praising the House for already passing his stimulus bill, he made a thinly veiled jab at Republicans for having "come to the table with the same tired arguments and worn ideas" that helped to cause the current economic crisis.

But despite taking a sometimes humorous tone with his fellow Democrats, Obama hardly failed to underscore the potentially dire consequences of inaction.

Without swift passage of his stimulus bill, Obama said, "an economy that is already in crisis will be faced with catastrophe."

Senate leaders, meanwhile, remained in Washington in late talks on the bill, which grew to more than $900 billion this week.

A couple of senior Democratic aides told FOX News late Thursday final passage of the current bill is very likely Friday despite the efforts of a group of 18 senators who have been negotiating a compromise package to get more senators on board.

The group claimed earlier in the day to have stripped out close to $100 billion. But asked whether the group can get a compromise, one negotiator, Republican Sen. Mel Martinez of Florida, replied late in the day: "Not likely."

Disagreements over the bill have created a power struggle in the Senate, leaving Senate leadership -- as well as the White House -- straining to assert authority.

Senate Majority Leader Harry Reid said on the Senate floor said that lawmakers will be "burning the midnight oil" Thursday night to complete the stimulus bill, though they later broke for the evening well before midnight.

Reid said he is hopeful that the Senate will achieve consensus and agree to a bill "we feel good about," and he argued that if there were reports that the Senate stimulus bill was failing, the stock market may crash Friday morning.

Reid told reporters Thursday he believes he has the 60 votes to pass the existing bill being debated, and made clear that the bipartisan group does not speak for the leadership or the president.

"They cannot hold the president of the United States hostage," he said. "And if they think they can rewrite this bill ... they've got another thing coming."

A Reid aide later clarified that the Senate Democratic leader is open to considering the bipartisan group's proposal. But Senate Democratic Whip Dick Durbin of Illinois warned against cuts.

"Every time we lop off $100 billion, we're lopping off jobs," he said.

Sen. Chuck Schumer, D-N.Y., signaled that Democratic leaders are lowering the vote count they had hoped to get if it means sticking close to the original plan.

"The idea the president had of 80 votes -- that's a distant memory," he said. "We're working hard to pass this bill, but make no mistake about it. We'd rather pass a good bill with 65 votes, than a bill that doesn't work with 80 votes."

Meanwhile, Obama has tried to push passage, taking to the TV airwaves and publishing an op-ed in The Washington Post defending his plan. On Monday evening, he was addressing the House Democratic conference meeting in Williamsburg, Va., and would likely repeat words spoken earlier in the day when he said, "The time for talk is over. The time for action is now."

Those lines have raised questions from some about the president's tactics and whether he's demonstrated enough leadership in the negotiations.

Republican Sen. Lindsey Graham said Thursday that senators are "making this up as we go" and accused Obama of being "AWOL on providing leadership." He accused the president of trying to "scare" people.

Fellow Republican John McCain's attempts to cut income and payroll taxes in an alternative bill were also shot down in the Senate Thursday afternoon.

White House press secretary Robert Gibbs gave mixed signals at Thursday's briefing as to how involved Obama was in the negotiations, saying Obama is watching the Senate to see what happens. "He continues to reach out," Gibbs then added.

As new polls show the public turning pessimistic over the stimulus plan, Gibbs rejected the notion that Obama has allowed his own package to be redefined in public by unhappy lawmakers.

"I don't think Capitol Hill speaks for what we're for and what we're against," he said. "He's not a senator ... He's not a member of the House. He's the president of the United States."

As Obama plans to meet with his loyal House majority, House Minority Leader John Boehner issued a statement restating that "dramatic changes" are still needed in the bill. Discussions were no less tense on the House side than they are on the Senate. The House approved an $819 billion version of the package without any GOP support last week. .

Leaders of the Democratic Blue Dogs, some of whom joined Republicans in voting against the House bill, wrote House Speaker Nancy Pelosi on Wednesday urging the leadership to follow the Senate's lead in stripping out spending.

"While a number of Blue Dogs voted against the package considered in the House, many of those who did support it did so with serious reservations," they wrote, calling for a "redoubled effort to streamline" the package.

Gibbs said it is still the president's hope that the House and Senate will resolve their differences and get a bill to the president's desk by Obama's own self-imposed deadline, Feb. 16.

FOX News' Trish Turner contributed to this report.