Updated Oct. 13, 2013 2:58 p.m. ET
The Senate's two top leaders worked Sunday to overcome differences to avoid a U.S. debt crisis and reopen the federal government as the U.S. Treasury was running out ways to stay under the nation's borrowing limit.
As the Senate opened its unusual Sunday session, Senate Majority Leader Harry Reid (D., Nev.) struck an optimistic note about his talks with Senate Republican Leader Mitch McConnell (R, Ky.), but gave no indication that either side had budged 13 days into a partial government shutdown.
"I met yesterday with Sen. McConnell. We're in conversation today,'' Mr. Reid said. "I'm confident Republicans will allow the government to open and extend the ability of this country to pay its bills."
Although Mr. Reid and others expressed optimism that the impasse would be broken, senior aides in both parties said it appeared unlikely that negotiations would produce a deal Sunday in advance of Monday's opening of U.S. and world financial markets, which are starting to show jitters about the standoff.
Earlier Sunday, Sen. Charles Schumer (D., N.Y.), speaking on CBS, said the two parties had major differences to overcome but that he was "cautiously hopeful."
Sen. Charles Schumer (D., N.Y.), left, and Senate Majority Leader Harry Reid address reporters at a news conference at the U.S. Capitol on Saturday. Reuters
After talks between President Barack Obama and House Republicans broke down, Messrs. Reid and McConnell met for the first time since government partially closed on Oct. 1, with the aim of ending the spending standoff before the U.S. Treasury on Thursday exhausts measures it has been using to stay under debt limit. Mr. Schumer attended the meeting along with Sen. Lamar Alexander (R., Tenn.).
Mr. Schumer said his party's top priority was to find a way to ease the next round of across-the-board spending cuts. The first round of those automatic spending cuts, known as the sequester, went into effect in March. A second round will kick in early next year. He suggested the government be reopened and funding be extended for long enough to allow the parties to agree on a broader budget plan to replace the next round of cuts.
Republicans and Democrats also maneuvered Sunday to protect differing priorities as the Senate talks continue.
Sen. Rand Paul , a Kentucky Republican, said he believes breaching the U.S. borrowing limit "is not a good idea," but he accused Senate Democrats of "getting greedy" in the latest stages of negotiations. He pointed to the demand that Republicans agree to allowing spending to exceed levels set under the sequester.
"The sequester is the law of the land and if we exceed that, it's a real big step in the wrong direction," Mr. Paul said on CNN. "I can't imagine you are going to get Senate Republicans to vote for something that exceeds the sequester cap."
Sen. Susan Collins , a moderate Maine Republican at the center of a bipartisan Senate effort to break the budget impasse, said she would continue to try to forge elements of a compromise despite having her initiative sidelined in favor of negotiations between the two top Senate leaders.
Ms. Collins hosted bipartisan talks with a dozen senators in recent days, only to see Senate Democrats reject the initiative on Saturday. Conservative House Republicans had also reacted negatively to emerging details of her plan.
"I think that's very positive. We're going to keep working, offering our suggestions to the leadership on both sides of the aisle," Ms. Collins said on CNN.
The Collins plan called for extending the nation's borrowing authority through January and opening the government through March. But the measure would have done nothing to undo the sequester. It also would have repealed a tax on medical devices imposed under the 2010 federal health law, a proposition Republicans favor but many Democrats don't.
Sen. Amy Klobuchar (D., Minn.), who was part of the Collins group, said on CNN she has spoken with Senate Democratic leaders and expects pieces of the proposal to be part of an eventual compromise. "You'll see today as negotiations continue, elements of this proposal, which I think is really important," Ms. Klobuchar said.
The talks came against a backdrop of rising public frustration with the partial government shutdown, now in its 13th day, and market anxiety about the prospect of a U.S. debt default. The Treasury says that by Thursday it will be left with only about $30 billion to pay the nation's bills, which could run out in a week or two.
Senate leaders gave no firm deadline to reach a deal, but said they hoped to resolve the situation over the next two days. They made clear they were aware that the uncertainty shrouding the debt ceiling could worry investors when the market reopens Monday.
Many House lawmakers have left Washington for the weekend, a further indication that the Senate was building the likeliest avenue toward a resolution. They return for votes on Monday evening.
Any deal that the Senate settles on is sure to present a quandary to conservative House Republicans: It is likely to fall short of the policy demands they have been seeking, but will likely arrive shortly before Oct. 17, leaving little time for further negotiations.
Conservative lawmakers were already bracing for a proposal they would find disappointing, if not unacceptable. When House Republicans heard details of the Collins proposal, there were "a lot of nods of agreement and understanding that this is a bad idea," said Rep. John Fleming (R., La.). "It's a nonstarter with us. We'd never go along with that."
Also Saturday, a bill to extend the country's borrowing limit through the end of 2014 failed in the Senate on a procedural vote that fell along partisan lines. Republicans were unlikely to back the measure while their top party leaders were in negotiations on the debt ceiling, and no GOP senators voted for it.
The measure to raise the debt ceiling, which included no other policy proposals, fell short of securing the 60 votes required to open debate on it, failing to advance on a 53-45 vote.
Some House Republicans, meanwhile, said they still wanted any agreement to include changes to the 2010 health law, a top priority that had given way among Republicans in recent days in favor of attempts to win deficit-reduction measures.
Rep. Jim Jordan (R., Ohio) a leader of the tea-party movement in Congress, appearing on Fox, said "we need to delay this law, period," referring to Mr. Obama's signature legislative achievement, the Affordable Care Act. "We're going to keep weighing in on Obamacare" before agreeing to increase the debt ceiling, Mr. Jordan said.
Federal agencies were forced to suspend many activities and place hundreds of thousands of workers on furlough on Oct. 1, the start of the fiscal year, after Congress failed to pass a bill to fund the government.
—Thomas M. Burton contributed to this article.
Write to Janet Hook at [email protected], Kristina Peterson at [email protected] and Ryan Tracy at [email protected]
The Senate's two top leaders worked Sunday to overcome differences to avoid a U.S. debt crisis and reopen the federal government as the U.S. Treasury was running out ways to stay under the nation's borrowing limit.
As the Senate opened its unusual Sunday session, Senate Majority Leader Harry Reid (D., Nev.) struck an optimistic note about his talks with Senate Republican Leader Mitch McConnell (R, Ky.), but gave no indication that either side had budged 13 days into a partial government shutdown.
"I met yesterday with Sen. McConnell. We're in conversation today,'' Mr. Reid said. "I'm confident Republicans will allow the government to open and extend the ability of this country to pay its bills."
Although Mr. Reid and others expressed optimism that the impasse would be broken, senior aides in both parties said it appeared unlikely that negotiations would produce a deal Sunday in advance of Monday's opening of U.S. and world financial markets, which are starting to show jitters about the standoff.
Earlier Sunday, Sen. Charles Schumer (D., N.Y.), speaking on CBS, said the two parties had major differences to overcome but that he was "cautiously hopeful."
Sen. Charles Schumer (D., N.Y.), left, and Senate Majority Leader Harry Reid address reporters at a news conference at the U.S. Capitol on Saturday. Reuters
After talks between President Barack Obama and House Republicans broke down, Messrs. Reid and McConnell met for the first time since government partially closed on Oct. 1, with the aim of ending the spending standoff before the U.S. Treasury on Thursday exhausts measures it has been using to stay under debt limit. Mr. Schumer attended the meeting along with Sen. Lamar Alexander (R., Tenn.).
Mr. Schumer said his party's top priority was to find a way to ease the next round of across-the-board spending cuts. The first round of those automatic spending cuts, known as the sequester, went into effect in March. A second round will kick in early next year. He suggested the government be reopened and funding be extended for long enough to allow the parties to agree on a broader budget plan to replace the next round of cuts.
Republicans and Democrats also maneuvered Sunday to protect differing priorities as the Senate talks continue.
Sen. Rand Paul , a Kentucky Republican, said he believes breaching the U.S. borrowing limit "is not a good idea," but he accused Senate Democrats of "getting greedy" in the latest stages of negotiations. He pointed to the demand that Republicans agree to allowing spending to exceed levels set under the sequester.
"The sequester is the law of the land and if we exceed that, it's a real big step in the wrong direction," Mr. Paul said on CNN. "I can't imagine you are going to get Senate Republicans to vote for something that exceeds the sequester cap."
Sen. Susan Collins , a moderate Maine Republican at the center of a bipartisan Senate effort to break the budget impasse, said she would continue to try to forge elements of a compromise despite having her initiative sidelined in favor of negotiations between the two top Senate leaders.
Ms. Collins hosted bipartisan talks with a dozen senators in recent days, only to see Senate Democrats reject the initiative on Saturday. Conservative House Republicans had also reacted negatively to emerging details of her plan.
"I think that's very positive. We're going to keep working, offering our suggestions to the leadership on both sides of the aisle," Ms. Collins said on CNN.
The Collins plan called for extending the nation's borrowing authority through January and opening the government through March. But the measure would have done nothing to undo the sequester. It also would have repealed a tax on medical devices imposed under the 2010 federal health law, a proposition Republicans favor but many Democrats don't.
Sen. Amy Klobuchar (D., Minn.), who was part of the Collins group, said on CNN she has spoken with Senate Democratic leaders and expects pieces of the proposal to be part of an eventual compromise. "You'll see today as negotiations continue, elements of this proposal, which I think is really important," Ms. Klobuchar said.
The talks came against a backdrop of rising public frustration with the partial government shutdown, now in its 13th day, and market anxiety about the prospect of a U.S. debt default. The Treasury says that by Thursday it will be left with only about $30 billion to pay the nation's bills, which could run out in a week or two.
Senate leaders gave no firm deadline to reach a deal, but said they hoped to resolve the situation over the next two days. They made clear they were aware that the uncertainty shrouding the debt ceiling could worry investors when the market reopens Monday.
Many House lawmakers have left Washington for the weekend, a further indication that the Senate was building the likeliest avenue toward a resolution. They return for votes on Monday evening.
Any deal that the Senate settles on is sure to present a quandary to conservative House Republicans: It is likely to fall short of the policy demands they have been seeking, but will likely arrive shortly before Oct. 17, leaving little time for further negotiations.
Conservative lawmakers were already bracing for a proposal they would find disappointing, if not unacceptable. When House Republicans heard details of the Collins proposal, there were "a lot of nods of agreement and understanding that this is a bad idea," said Rep. John Fleming (R., La.). "It's a nonstarter with us. We'd never go along with that."
Also Saturday, a bill to extend the country's borrowing limit through the end of 2014 failed in the Senate on a procedural vote that fell along partisan lines. Republicans were unlikely to back the measure while their top party leaders were in negotiations on the debt ceiling, and no GOP senators voted for it.
The measure to raise the debt ceiling, which included no other policy proposals, fell short of securing the 60 votes required to open debate on it, failing to advance on a 53-45 vote.
Some House Republicans, meanwhile, said they still wanted any agreement to include changes to the 2010 health law, a top priority that had given way among Republicans in recent days in favor of attempts to win deficit-reduction measures.
Rep. Jim Jordan (R., Ohio) a leader of the tea-party movement in Congress, appearing on Fox, said "we need to delay this law, period," referring to Mr. Obama's signature legislative achievement, the Affordable Care Act. "We're going to keep weighing in on Obamacare" before agreeing to increase the debt ceiling, Mr. Jordan said.
Federal agencies were forced to suspend many activities and place hundreds of thousands of workers on furlough on Oct. 1, the start of the fiscal year, after Congress failed to pass a bill to fund the government.
—Thomas M. Burton contributed to this article.
Write to Janet Hook at [email protected], Kristina Peterson at [email protected] and Ryan Tracy at [email protected]