WASHINGTON -- Plagued by internal divisions, Republicans stumbled badly on two budget fronts as the House postponed action on a major deficit-reduction bill and the Senate Finance Committee couldn't summon a majority for promised tax-cut extensions.

Republican leaders insisted that the setbacks were temporary. But the level of disarray was striking, and the delays throw a monkey wrench into plans to wrap up this session of Congress.

The Finance panel has rescheduled a meeting Monday and is leaning toward shelving plans to extend President Bush's 15% rates for capital gains and dividends, set to expire at the end of 2008. House Ways and Means Committee Chairman Bill Thomas will mark up his version of the tax cuts Tuesday, including the extension of the lower rates. But getting House floor time will be hard until the deficit-reduction debate is resolved, and the California Republican's tax bill doesn't provide any relief for middle-income families threatened by the alternative-minimum tax.

Most clear are the growing divisions between Republican moderates and conservatives as Mr. Bush's standing in the polls has fallen and more tensions have surfaced over the deficit and the party's fiscal agenda.

The troubles in the House are more remarkable because it has been an engine for the Republican agenda. The leadership is clearly strained since former Majority Leader Tom DeLay (R., Texas) stepped down after his indictment for alleged campaign-finance violations. Still, he hovers over the shoulder of his successor, Rep. Roy Blunt (R., Mo.), and conservative committee chairmen close to Mr. DeLay have been more rebellious as Mr. Blunt tries to thread his way through the problems.

The rivalry between the conservative Republican Study Committee, which wants spending and tax cuts, and the moderates' Tuesday Group is open and sometimes raw. Moderates speak derisively of the RSC as the "College Republicans." With a smile, Rep. Michael Castle (R., Del.) told a reporter this week, "You have to understand, the RSC not only doesn't like to lose, they don't like us to win."

Budget debates are always partisan fights, but the lines are also more sharply drawn this year because of economic troubles in farm states, where rural moderate Democrats once might have been willing to cross the aisle. Instead, with farmers facing low commodity prices and high energy costs, these lawmakers are as opposed to spending and tax cuts this year as more liberal urban Democrats.

Much of the government is still operating under a stopgap funding bill that expires Nov. 18, and on this Veterans Day weekend, Congress has approved neither the defense budget nor new money for veterans medical care for the fiscal year that began Oct. 1.

The one bright spot -- and show of unity last night -- was a $21 billion foreign-aid bill passed and sent to the White House, reflecting an historic commitment to fighting disease overseas. Funding to battle AIDS, malaria, and tuberculosis rose to $2.82 billion, and altogether about $3.4 billion is devoted to health-related programs.

By comparison, the $50 billion-plus deficit-reduction bill, pulled from the House floor, has upset moderates, who worry that too much is being taken from the working poor when Republicans are extending tax cuts, such as those for capital gains that favor higher income households.

Late Wednesday, Republicans had hoped to buy peace by removing a plan to open up portions of the Arctic National Wildlife Refuge to oil and gas exploration. But as swing members were brought in to talk with Speaker Dennis Hastert (R., Ill.), the House remained in recess for most of yesterday.

As more lawmakers left for the weekend, the leadership found it was only falling further behind. "We weren't quite ready to go to the floor," Mr. Blunt said after pulling the bill.

In the Senate Finance Committee, it took only one moderate, Sen. Olympia Snowe (R., Maine), to frustrate Chairman Charles Grassley (R., Iowa), who needs all 11 of the panel's Republicans to support his bill.

To get Ms. Snowe's vote, Mr. Grassley had proposed just a one-year extension of the 15% capital-gains and dividend rates. Now it seems more likely he will jettison the investor tax breaks entirely and assume they can be restored when the final tax package is negotiated with the House.

Ms. Snowe, who faces re-election next year in a state that Mr. Bush lost in 2004, said she has become increasingly concerned about the government's deficits, which are aggravated by the costs of wars in Iraq and Afghanistan and rebuilding the Gulf Coast after the recent devastating hurricanes. Extending tax cuts that don't expire until 2008, she said, should take second priority.

"In the end it is going to get done," said Sen. Gordon Smith (R., Oregon), but he himself helped blocked the same sort of Medicaid savings that have aggravated moderates in the House. "It's a lot easier to get people to eat candy than spinach," said Rep. Tom Cole (R., Okla.), "And right now we are on the spinach side of the plate."

Write to David Rogers at david.rogers@wsj.com and Brody Mullins at brody.mullins@wsj.com

Commentary:
One has to wonder what a budget setback looks like to the WSJ and the GOP. Does it mean "no more record deficits?" The fiscal conservatives claim they own the congress but look what's happened since they took power. The debt has risen trillions of dollars since Bush has been in office. If that wasn't a budget setback, nothing is.