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US Senate leaders upbeat on debt negotiations | US Senate leaders upbeat on debt negotiations |
(35 minutes later) | |
US Senate leaders have expressed optimism after a flurry of negotiations on raising the federal debt ceiling to avert a potentially disastrous default. | |
Following talks with his Republican counterpart, the Senate's top Democrat spoke of "tremendous progress". | |
They were also nearing a deal to end a partial government shutdown, now in its third week, congressional sources said. | |
The US must raise its $16.7tn (£10.5tn) borrowing limit by Thursday or risk failing to pay its bills. | |
As he toured a soup kitchen for the poor in Washington DC on Monday, President Barack Obama warned that "defaulting would have a potentially devastating effect on our economy". | As he toured a soup kitchen for the poor in Washington DC on Monday, President Barack Obama warned that "defaulting would have a potentially devastating effect on our economy". |
He had been due to hold talks at the White House with congressional leaders that afternoon, but the meeting was postponed to allow the parties more time to cobble together an agreement. | |
'Tremendous progress' | 'Tremendous progress' |
According to US media, the deal currently under discussion would fund the government until 15 January while raising the debt ceiling until early to mid-February. | |
Senate Democratic Majority Leader Harry Reid told the chamber on Monday evening: "We've made tremendous progress. | |
"We hope with good fortune... perhaps tomorrow will be a bright day. We're not there yet." | |
Republican Senate Minority Leader McConnell also sounded upbeat, hailing "substantial progress". | |
John Boehner, the Republican leader and Speaker of the House of Representatives, also met Senator McConnell. | |
A closed-door session of Republican senators and representatives was set for Tuesday morning. | A closed-door session of Republican senators and representatives was set for Tuesday morning. |
Democrats appear to have so far fended off Republican attempts to force any major changes to President Obama's signature healthcare law. | |
Conservative hardliners were initially vocal in demanding that the White House agree to delay or eliminate funding for the Affordable Care Act. | |
However, Senate Republicans are still reportedly pushing for slight modifications to the law. According to US media, they want stricter measures to verify the incomes of those seeking health insurance subsidies. They also aim to suspend a tax on medical devices. | |
'Surrender caucus' | 'Surrender caucus' |
Even if a deal is reached in the Senate, it is unclear whether Congress could act in time to pass legislation that would avert the 17 October default deadline. | |
Hardline conservatives such as Texas Republican Ted Cruz could use Senate rules to stonewall a vote. | |
A budget bill would also need to pass the House of Representatives, where it could meet fierce resistance from the Tea Party-aligned Republicans who triggered the whole political deadlock two weeks ago. | |
One of those conservative hardliners, Kansas Representative Tim Huelskamp, was quoted by the New York Times as labelling his upper chamber colleagues "the Senate surrender caucus". | One of those conservative hardliners, Kansas Representative Tim Huelskamp, was quoted by the New York Times as labelling his upper chamber colleagues "the Senate surrender caucus". |
"Anybody who would vote for that [Senate deal] in the House as Republican would virtually guarantee a primary challenger," he said. | "Anybody who would vote for that [Senate deal] in the House as Republican would virtually guarantee a primary challenger," he said. |
Republicans have taken the brunt of blame for the latest fiscal cliffhanger to cripple Capitol Hill, according to opinion polls. | |
A Washington Post/ABC News survey released on Monday found that 74% of voters were unhappy with how congressional Republicans have handled the standoff, compared with a 53% disapproval rating for Obama. | |
Some in the party have voiced concern that the affair could damage its prospects in next year's midterm elections | |
Economists, bankers and politicians in both parties have warned for weeks of dire consequences should Congress fail to reach an agreement on raising the nation's debt ceiling. | Economists, bankers and politicians in both parties have warned for weeks of dire consequences should Congress fail to reach an agreement on raising the nation's debt ceiling. |
The US Treasury has been using what are known as "extraordinary measures" to pay its bills since the nation reached its current debt limit in May. | The US Treasury has been using what are known as "extraordinary measures" to pay its bills since the nation reached its current debt limit in May. |
Those methods will be exhausted by 17 October, US Treasury Secretary Jack Lew has said. | Those methods will be exhausted by 17 October, US Treasury Secretary Jack Lew has said. |
Meanwhile, the government remains partially shut down because Congress failed to agree on funding by a 1 October deadline. | |
The impasse has closed a swathe of federal services and left hundreds of thousands of employees out of work. |