Senators close in on deal as threat of default nears

by Matt Kaludi | Tuesday, Oct 15, 2013 | 1605 views

Senators close in on deal as threat of default nearsWASHINGTON (Reuters) – U.S. senators said they were closing in on a deal Monday that would reopen the government and push back a possible default for several months, though many hurdles remained as a Thursday deadline drew near.

The Senate’s top Democrat and top Republican both said they hoped they could soon reach an agreement that would allow them to avert a looming default and end a partial government shutdown that has dragged on for 14 days so far.

“I’m very optimistic that we that we will reach an agreement that’s reasonable in nature this week,” Senate Democratic Leader Harry Reid said on the Senate floor.

Lawmakers are racing against the clock, with U.S. officials estimating that the federal government could run out of borrowing capacity on October 17.

The plan under discussion would raise the $16.7 trillion debt ceiling by enough to cover the nation’s borrowing needs at least through mid-February 2014, according to a source familiar with the negotiations.

It also would fund government operations through the middle of January, keeping in place the across-the-board “sequester” spending cuts that took effect in March, though government agencies would have more latitude to ease their impact. It would also set up a new round of budget talks that would try to strike a bargain by year’s end.

Any deal would also have to win approval in the House of Representatives, where conservative Republicans have insisted that any continued government funding must include measures to undercut President Barack Obama’s signature health law – a nonstarter for Democrats.

 

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