The Republican-led U.S. House of Representatives has approved a plan to cut more than $100 billion from the federal budget next year, in exchange for raising the country's borrowing limit.

By a mostly partisan vote, the so-called Cut, Cap and Balance Act was approved Tuesday night. It would cut non-defense federal spending, limit future spending and require a constitutional mandate for a balanced federal budget. Almost no Democrats in the House voted for it.

The bill now heads to the Democratic-controlled Senate, where it has virtually no chance of passing. President Barack Obama also has said he would veto it.

The United States is facing an August 2 deadline to raise its debt ceiling or start defaulting on some of its obligations. Negotiations between the president and Republican leadership have stalled over whether to use taxes to raise more money while cutting spending.

Mr. Obama said efforts should now focus on a plan being put forward by a bi-partisan group of U.S. senators known as the “Gang of Six.” Their plan calls for an immediate $500 billion in spending cuts as part of a larger effort to slash spending by $4 trillion over the next decade. It also would make significant changes to major social welfare programs and raise $1 trillion in tax revenues over 10 years.

President Obama told reporters at the White House Tuesday that lawmakers “don't have any more time to posture.” He said failure to reach a deal on raising the country's debt limit would soon cause an adverse reaction in stock markets around the world.

Top U.S. officials and some economists have warned that a default would have catastrophic consequences, possibly throwing the United States back into recession.

Democratic Senate Majority Leader Harry Reid continues to hold talks with Republican Senate Minority Leader Mitch McConnell on McConnell's proposal to give the president sole authority to raise the debt limit by $2.5 trillion in three installments over the next year. Mr. Obama characterized that plan as a fail-safe.

Congress must raise the $14.3 trillion borrowing limit by August 2 so the government can meet its financial obligations. The president held talks with congressional leaders last week in hopes of reaching agreement on a plan that would cut trillions of dollars from the budget, but Republicans have refused to accept Mr. Obama's insistence that such cuts be accompanied by revenue increases.