WASHINGTON — Racing the clock, the Senate's Democratic and Republican leaders closed in on a deal Monday night to avoid an economy-menacing Treasury default and end the two-week partial government shutdown.
"We've made tremendous progress," Senate Majority Leader Harry Reid declared after an intense day of negotiations with Senate Republican Leader Mitch McConnell and other lawmakers. "Perhaps tomorrow will be a bright day," he said, suggesting agreement could be announced soon after weeks of stubborn gridlock.
McConnell also voiced optimism — but the emerging accord generated little if any satisfaction among rebellious House conservatives.
Officials said that under the discussion to date, the $16.7 trillion federal debt limit would be raised enough to permit the Treasury to borrow normally until mid-February if not a few weeks longer.
The government would reopen with enough money to operate until mid-January at levels set previously, and agencies would be given flexibility in adjusting to reduced funding levels imposed by across-the-board spending cuts.
Officials cautioned that those details could change, and there was even more uncertainty about other elements of a possible deal.
Under discussion was a one-year delay in a $63 fee imposed on companies by the health care law known as Obamacare for everyone covered by an employer-sponsored plan. By day's end, though, Republican opposition to the provision placed it in jeopardy -- just as Democrats had earlier pushed back against the proposed repeal of a medical device tax contained in the health care law.
The two sides were also discussing a requirement that individuals seeking subsidies under the health care law to pay for coverage would be subject to stronger income verification measures.
The government has been partly closed since Oct. 1, and the Obama administration says the Treasury will run out of borrowing authority to fully pay the nation's bills on Thursday.
The result has been a partisan showdown that polls show is alienating all sectors of the electorate except tea party supporters -- and has been a big political loser for Republicans.
As a midweek deadline for raising the debt limit neared, the stock market turned positive on bullish predictions from the two longtime antagonists at the center of the talks, Reid and McConnell.
Though McConnell expressed optimism about an agreement, his words were not as strong as Reid's. "We've made substantial progress, and we look forward to making more progress in the near future," he said as the Senate adjourned for the evening.