WASHINGTON — After weeks of intense partisanship, President Barack Obama and congressional leaders made a last-minute stab at compromise Saturday night to avoid a government default threatened for early this week.
"There are many elements to be finalized … there is still a distance to go," Senate Majority Leader Harry Reid cautioned in dramatic late-night remarks on the Senate floor.
Still, his disclosure that "talks are going on at the White House now," coupled with his announcement that progress had been made, offered the strongest indication yet that an economy-crippling default might be averted.
The Associated Press reported that the White House and Republican leaders were making significant progress toward an agreement. Among the details discussed was a plan to raise the debt limit by about $2.4 trillion and enact spending cuts of a slightly larger amount in two stages, the AP reported, citing unnamed officials.
The deal under discussion would also require Congress to vote on a balanced budget amendment to the Constitution, but not require its approval, the AP said.
White House officials had no immediate comment.
Nor was there any immediate reaction from Senate Republican leader Mitch McConnell or House Speaker John Boehner, Obama's principal Republican antagonist in a contentious era of divided government.
Reid, D-Nev., said that at the request of White House officials, he was postponing a test vote that had been set for around 1 a.m. today on his legislation to raise the debt limit while cutting spending.
Republicans had opposed his bill, and had said in advance that they had the votes to block it.
Earlier in the day, at a news conference with Boehner, McConnell said, "I'm confident and optimistic that we're going to get an agreement in the very near future and resolve this crisis in the best interests of the American people."
Without legislation in place by Tuesday, administration officials say, the Treasury will run out of funds to pay all the nation's bills. They say a subsequent default could prove catastrophic for the U.S. economy and send shock waves around the world.
The president is seeking legislation to raise the government's $14.3 trillion debt limit by about $2.4 trillion, enough to tide the Treasury over until after the 2012 elections. Over many weeks, he has agreed to Republican demands that deficits be cut — without a requirement for tax increases — in exchange for additional U.S. borrowing authority.
But Obama has threatened to veto any legislation that would require a second vote in Congress for any additional borrowing authority to take effect, saying that would invite a recurrence of the current crisis in the heat of next year's election campaigns.
During the day, Democratic and Republican leaders exchanged testy comments. After McConnell's upbeat assessment that a deal could be reached, Reid issued a pointed rebuttal.
"That's not true," said the Nevada Democrat after returning from a meeting at the White House with Obama and House Democratic leader Nancy Pelosi.
'Very little time'
Obama, in his weekly radio and Internet address, said there were several ways out of the gridlock that has prevented action by Congress, then added: "There is very little time."
But to get to the endgame, Republicans and Democrats had to go through the formality of killing each other's bills — scoring their own political points — before they could turn to meaningful negotiations.
And a few hours after the president spoke, House Republican leaders engineered a vote to defeat the Reid-drafted proposal to raise the debt limit on a near-party line vote at midafternoon.
That was payback of sorts — Reid had engineered the rejection of a House-passed bill on Friday within minutes after it reached the Senate.
Individual lawmakers expressed anxiety about the prospect that faced the country if it were to default for the first time in history.
"I'm worried about Congress defaulting on our country," said Sen. Johnny Isakson, R-Ga., urging lawmakers to find common ground. He suggested that spending cuts take place automatically if necessary to ensure the debt limit does not expire before 2013.
In his remarks at the news conference held by McConnell and Boehner, McConnell said he had spoken several times during the day with Vice President Joe Biden, who played a prominent role in earlier attempts to break the gridlock that has pushed the country to the verge of an unprecedented default.
Boehner said, "I think we're dealing with reasonable, responsible people who want this crisis to end as quickly as possible and I'm confident it will."
Information from the Associated Press and McClatchy Newspapers was used in this report.