Optimism grows over deal on US debt crisis
WASHINGTON // The US Senate plunged yesterday into what many politicians and the White House, and millions of Americans coast to coast, hoped would be an all-but-decisive last-minute effort to raise the nation's debt ceiling and defuse a crisis that still could lead to an unprecedented government default.
As senators began debate in a rare Sunday session, just hours after Saturday night's concluded, the Democratic leader, Harry Reid, said he was "cautiously optimistic" agreement could be reached.
But first, in a partisan vote, the Senate rejected an effort to advance a Democratic approach to resolving the debt issue. The vote was 50-49, or 10 short of the 60 votes needed to move forward on legislation proposed by Mr Reid that would have carried out $2.4 trillion (Dh8.8 trillion) in deficit reduction over 10 years while raising the debt ceiling by $2.2 trillion.
The outcome of that vote was expected and did not directly affect the behind-the-scenes negotiations on a compromise.
Immediately afterward, Mr Reid told fellow senators that while they were "not there yet". "We are hopeful and confident it can be done."
The Senate Republican leader, Mitch McConnell, a key player in the negotiations, said as he headed back to his office that the sides were "really, really close".
Tomorrow is the deadline for averting default, the day the Treasury says it will reach the limits of its borrowing authority to pay all the nation's bills.
Mr McConnell, from Kentucky, said earlier on yesterday's talk shows that negotiators were looking at a deal that would cut spending by some $3 trillion over the next decade while raising the debt ceiling next year in a two-stage process.
A Democratic official said the vice president, Joe Biden, had been on the phone with Mr McConnell many times over the preceding 24 hours. Mr Biden has remained a key negotiator for the White House following the more public role he had earlier in leading several weeks of debt talks with politicians.
Appearing on CNN and CBS, Mr McConnell said he hoped to soon be able to present to his fellow Republicans an agreement "that they'll consider supporting". That agreement would include raising the debt ceiling, cutting spending by some $1 trillion initially and creating a joint committee of members of Congress that would look at a larger plate of cuts including tax and entitlement changes.
Senator Chuck Schumer, a member of the Democratic leadership, told CNN that while "there is no final agreement," there was a sense of relief that the two sides were finally working on a compromise plan.
Mr Schumer later told CBS that one of the last sticking points is the creation of a "trigger" mechanism that would hit priorities of both parties if the committee does not come up with a plan for further deficit reduction.
On the House side, where Republican conservatives have pushed their party toward greater cuts and linking future debt ceiling raises to passage of a balanced-budget amendment, a leadership aide said that while the negotiators appeared to be heading in the right direction, no agreement will be final until members have a chance to weigh in.
Details of a possible accord began emerging on Saturday night after Mr Reid said on the Senate floor that the two sides were trying to nail down loose ends and complete an agreement.
"I'm glad to see this move toward co-operation and compromise, and hope it bears fruit," he said.
A Democratic official said that while bargainers were not on the cusp of a deal, one could gel quickly.
A Republican said there was consensus on general concepts but cautioned there were no guarantees of a final handshake.
Any pact would have to quickly pass both chambers of Congress after a rancorous period that has seen the two parties repeatedly belittle each other's efforts to end the stand-off.
Published: August 1, 2011 04:00 AM