Senate Democratic Leader Harry Reid said he plans to move ahead with a debt-limit bill to rival a House Republican proposal that got new life Friday, as President Obama said it's time to move forward with debt-reduction legislation that can be supported by both political parties.

With the U.S. moving perilously closer to default on its loans to cover years of deficit spending, the majority leader announced his plan to cut $2.5 trillion from the deficit over a decade. At the same time, House Speaker John Boehner announced he would include a balanced budget amendment in his proposal, which appeared to earn him the support he needed from recalcitrant Republicans...