The US House of Representatives has passed a Republican bill proposed by Speaker John Boehner to increase the nation's debt ceiling.
Mr Boehner's plan passed the House by a vote of 218-210, with 22 Republicans and every Democrat voting against.
It includes $900bn of spending cuts but quickly ran in trouble in the Senate, where it was voted down by 59-41.
The US risks defaulting on its financial obligations if a federal budget deal is not struck by 2 August.
Continued disagreements
Prior to the vote, Mr Boehner told Congress the plan advanced the "great cause of a balanced budget amendment".
Mr Boehner appeared heated in front of his colleagues in the House, slamming his fist on a podium on Friday evening and calling for lawmakers to pass his proposal.
His plan calls for a vote on an amendment to the US constitution - a move Democrats say is certain to be rejected by the Senate.
Mr Boehner said Republicans had tried their "level best" to reach a deal.
"I stuck my neck out a mile to get an agreement with the president of the United States," Mr Boehner said, referring to negotiations with President Barack Obama that twice broke down.
"My colleagues, I can tell you I have worked with the president and the administration since the beginning of this year to avoid being in this spot," he added.
"A lot of people in this town can never say yes," Mr Boehner said.
http://www.bbc.co.uk/news/world-us-canada-14351148
Note: 30 July 2011 Last updated at 00:45 GMT