Update: Later on Thursday, President Trump announced he will nominate federal prosecutor Jay Clayton as director of national intelligence.  

Washington — The House on Thursday defeated a last-ditch effort to extend a key spy authority until early July, after President Trump's pick for acting director of national intelligence rattled lawmakers.

The authority, known as Section 702 of the Foreign Intelligence Surveillance Act, is set to expire Friday. Congress has twice punted on the issue since the original deadline in April. 

The measure to push back the deadline to July 2 failed to clear the House in a 198 to 218 vote. House Speaker Mike Johnson, a Louisiana Republican, fast-tracked the measure, meaning it needed a two-thirds majority for passage.

Mr. Trump upended a bipartisan compromise to renew Section 702 for three years when he announced his decision last week to appoint housing regulator Bill Pulte as acting director of national intelligence. In the role, Pulte would oversee all of the nation's spy agencies.

Democrats said they would not support a renewal with Pulte installed at the Office of the Director of National Intelligence. They cited his lack of a national security background and his controversial tenure at the Federal Housing Finance Agency, during which he accused several of Mr. Trump's foes of mortgage fraud. The choice also elicited pushback from some Republicans. 

In a statement ahead of the vote, House Democratic leadership said Pulte's appointment is in "defiance" of the law that requires the intelligence chief to have national security experience and they "cannot in good conscience vote for reauthorization without significant reforms" to the FISA statute. 

Johnson called the decision "stunning." 

Even before Pulte's appointment, negotiations on a long-term renewal ran into issues in both the House and Senate from lawmakers across the political spectrum, with warrantless surveillance of Americans at the top of their list of concerns. Section 702 allows the government to collect the communications of noncitizens located outside the U.S. without a warrant, though it can also sweep up the data of Americans who are in contact with targeted foreigners.  

Mr. Trump on Tuesday dug in on his decision to appoint Pulte, appearing to move up his start date, after meeting with Johnson at the White House earlier in the day about the path forward. 

After meeting again with Johnson on Wednesday, Mr. Trump asked Congress to approve a short-term extension of Section 702 to "provide time for the selection and confirmation" of a permanent intelligence chief. 

Johnson called it a "good-faith gesture" to Democrats. 

"I think the Democrats need to take that and at least allow us a short-term extension on FISA," he said Tuesday. 

Senate Majority Leader John Thune, a South Dakota Republican, said Tuesday that the selection of a permanent appointment would "play an important role in unlocking the support that we need to get FISA done."

Republican Rep. Rick Crawford of Arkansas, the chairman of the House Intelligence Committee, said Wednesday a lapse in the spy power would be "uncharted territory." 

"Once this authorization expires, the clock starts ticking," he said during floor debate. "The implications get worse every single day. While the 702 database would remain available to search, the data in that database will become increasingly out of date." 

Crawford also cited the potential for service providers to refuse to comply with the government's requests for data if the statute lapses. 

Rep. Jamie Raskin of Maryland, the top Democrat on the House Judiciary Committee, argued that "government surveillance activities will continue unchanged" after Friday. 

"Everything that's already been authorized and certified is already in motion, and current FISA authorizations will continue unaffected, at least through March 17, 2027," he said, referring to the Foreign Intelligence Surveillance Court's reported annual recertification of the program. 

The House will now leave town until June 23. 

Asked by CBS News whether he would bring the House back before then, Johnson said, "What would be the point of me going through this exercise?"