The U.S. Senate has rejected a debt limit bill, shortly after the House of Representatives approved a revised plan to cut spending and raise the country's $14.3 trillion borrowing limit, in an effort to avoid default next week.

The Senate voted 59 to 41 Friday to set aside a vote on the plan, put forth by House Speaker John Boehner. House lawmakers had voted 218 to 210 in favor of it.

Late Friday, Democratic leaders in the Senate urged Republican lawmakers to support a bill put forth by Senate Majority Leader Harry Reid. His plan would cut government spending by $2.5 trillion, and raise the legal limit on borrowing enough to fund the government through the end of 2012.

In a press conference, Reid said the measure he put forward is a “compromise.” He said unless Republicans support his plan, the U.S. is headed for “disaster.” Another top Democratic Senator, Charles Schumer of New York, said the debt ceiling must be extended at least though the end of 2012. He rejected any short-term extensions, such as the one called for in the Boehner plan.

U.S. lawmakers plan to work in the coming days to come up with a plan aimed at averting a debt default that could have devastating effects on the U.S. economy.

The U.S. will run out of money to pay its bills if the country's debt limit is not raised by Tuesday . But late Friday, the Moody's Investors Service said the United States should be able to keep its elite triple-A credit rating for now as long as Washington works out a deal to pay its bondholders.

The Boehner plan calls for raising the U.S. borrowing limit in exchange for more than $900 billion in spending cuts over the next 10 years. It also offers to raise the debt limit again early next year if Washington can work out more spending cuts. Democrats oppose revisiting the debt ceiling issue again so soon because they say it would mean another round of divisive political wrangling, amid presidential and congressional campaigns.

The House proposal also includes tougher requirements on Congress to pass a balanced budget amendment to the Constitution and send it to the states for ratification, a long-time demand of conservative Republicans who say it is the only way to control spending.

In a statement after Friday's House vote, U.S. President Barack Obama said the Boehner proposal would have the U.S. face another debt ceiling crisis in a few months.

Mr. Obama also praised the Senate plan put forth by Reid.