Speaker John Boehner is meeting all 240 House Republicans Meanwhile, President Barack Obama has called for compromise.
The fiscal fiasco leaves the US inching closer to a potentially catastrophic default on federal debt next Tuesday.
The US government will start running out of money to pay all its bills unless a $14.3tn (£8.7tn) borrowing limit is increased by 2 August.
'Last train leaving' At the White House, Mr Obama urged compromise and accused House Republicans of pursuing a partisan bill.
"There are plenty of ways out of this mess, but we are almost out of time," he said.
"The time for putting party first is over," he added. "The time for compromise on behalf of the American people is now."Later on Friday, the US treasury department is expected to unveil emergency plans explaining how the government would function if Congress does not agree to raise its borrowing limit.
In Congress, the arm-twisting continued on Friday morning.
Amid doubts over whether a bill by House Speaker John Boehner has enough Republican - let alone opposition - support, Senate Democratic Leader Harry Reid told the upper chamber he would bring his own bill to a vote later on Friday.
Mr Reid invited Republican Leader Mitch McConnell for compromise talks.
"Too much is at stake to waste even one more minute - the last train is leaving the station," Mr Reid said.
But Mr McConnell accused Democrats of wasting precious time and obstructing a deal by vowing to block Mr Boehner's bill, should it be passed in the House.
"Republicans have been doing the hard work of governing this week," he said.
Meanwhile, Mr Boehner was convening a closed meeting of all 240 House Republicans on Friday morning to outline tweaks he has made overnight to the legislation.
Mr Boehner and other Republican leaders spent all day Thursday arm-twisting dissident lawmakers, but they were unable to win over enough conservative Republicans.
Some Republicans - including Tea Party supporters who won House seats last year and oppose raising the debt limit under any circumstance - feel the Boehner bill would not cut enough from the US budget.
Mr Boehner's plan faces certain rejection by the Democratic-controlled Senate, as well as a White House veto threat, but could form the basis of an eventual compromise.
It would reduce spending by about $900bn and raise the debt limit by nearly the same amount.
The Reid plan - which Mr Obama supports - would cut $2.2tn from deficits, and raise the debt ceiling by $2.7tn.
Analysts say that if Republicans cannot pass a bill, the Senate could pass legislation first, which would increase the president's leverage.
One possible scenario is that Mr Obama and Senate Democrats could shape a bill to their liking, then dare divided House Republicans to plunge the nation into default by rejecting it.
Top Senate Democrat Harry Reid said late on Thursday that he may put his own deficit-cutting bill to a vote in the Senate.
The Boehner and Reid plans overlap in key ways, such as trimming spending over 10 years and shunning President Obama's call for tax increases on the wealthy and corporations.
But Mr Boehner's approach would force another debt-limit showdown during next year's presidential campaign, something Mr Obama has fiercely opposed.
Senate Majority Leader Reid's plan would see the ceiling lifted until after the November 2012 elections.
Analysts predict a last-minute scramble for a compromise and razor-edge votes in both chambers, with the high-stakes game of legislative brinkmanship expected to continue all weekend.
Washington hit its debt ceiling in May, but has used accounting adjustments, as well as higher-than-expected tax receipts, to continue operating.
In recent decades, the US Congress has increased the government's borrowing authority dozens of times as a matter of routine.
But this year newly elected conservative Republicans have demanded steep cuts to the budget deficit as the price of an increase.
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