Republican and Democratic leaders in the US Senate are reportedly “very close” to announcing a deal on the nation’s borrowing authority that would avert an unprecedented default on US debt.
Harry Reid and Mitch McConnell, the Senate majority and minority leaders held talks on Wednesday morning as the Thursday deadline on the debt limit is fast approaching.
The US Treasury taps out its reserves Wednesday midnight and there is no deal yet in Washington to raise the nation’s $16.7 trillion debt limit.
Lawmakers in the House of Representatives failed to produce a plan for ending the stalemate on Tuesday.
That shifted the focus back on the Senate to forge an agreement acceptable to both parties, as the government slides into day 16 of the shutdown.
Senate leaders said they were optimistic about an eleventh-hour agreement on Wednesday.
“Given tonight’s events, the leaders have decided to work toward a solution that would reopen the government and prevent default,” Don Stewart, a spokesman for McConnell, said in a statement. “They are optimistic an agreement can be reached.”
The Senate leaders’ last ditch effort was also given added urgency on Tuesday by a warning issued by the Fitch Ratings, the third largest credit rating agency, which put the US government on notice for a potential downgrade of the nation’s AAA credit worthiness.
Standard & Poor’s downgraded the US credit rating to AA status in 2011 following similar bickering over the federal spending and debt limit.
The emerging measure in the Senate would extend the borrowing authority through February, and include a spending bill to fund the government through January 15.
The deal is likely to be announced by midday, when the Senate formally opens for business, aides said on Wednesday morning.
The Senate measure should first get a House vote, and then the Senate must take up the bill for vote. After passage, it must be sent to President Barack Obama to be signed into law before the end of the day.
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