McConnell and Reid held an hour-long meeting in Reid’s office with two close Senate allies and left the Capitol by mid-afternoon. Late Saturday night neither side cited any progress, and Republicans reported that Democrats were dug in on their demand to increase funding for federal agencies.
During the fiscal crises that have gripped Capitol Hill over the past five years, each resolution and compromise came after Senate leaders picked up the pieces of failed efforts between the White House and the House.
In the morning session, Reid rejected a proposal crafted by rank-and-file Republicans with some Democratic input to raise the federal debt limit until Jan. 31 and fund federal agencies through the end of March. It also called for minor adjustments to Obama’s health-care law
At an afternoon news conference, Reid said he wanted a shorter period for stopgap funding and a longer extension of the Treasury’s borrowing authority. Reid particularly wants to scale back deep automatic spending cuts known as the sequester, which were passed during the 2011 debt-ceiling showdown and will take effect every January for the next decade, unless Congress amends them.
Sen. Richard J. Durbin (Ill.), the No. 2 Democrat in the Senate, called that issue “really the single biggest sticking point.”
The slow-moving talks appeared to nix earlier hopes that at least an outline for a deal could be in place before the financial markets opened Monday, as some senior senators suggested when momentum seemed to be building toward a plan by Sen. Susan Collins (R-Maine).
Senate Republicans — already stunned by Boehner’s inability to pass anything in the House — grew furious about Reid’s attempt to get relief from the sequester because they considered Collins’s plan the fastest path to a deal.
“This thing has gotten to the point of a real crisis for the country, and everybody keeps changing their position based on politics,” Sen. Lindsey O. Graham (S.C.) said after a long huddle on the Senate floor with McConnell and other Republicans.
It was a dramatic turnabout from Thursday morning, when Boehner’s leadership team signaled that it would support increasing the debt ceiling until almost Thanksgiving with the only demand being that Obama negotiate over a broader budget framework in the interim. With pressure on the debt issue appearing to ease, financial markets staged their biggest rally in a month.
The president, however, rejected Boehner’s offer because it did not address reopening the government, which has been closed since Oct. 1. Instead, the White House grew interested in the Senate talks over Collins’s plan because of its longer debt-ceiling window. According to the administration, Treasury Secretary Jack Lew will run out of options after Thursday for juggling the nation’s books, and by the end of the month, the Treasury will run out of cash to pay the government’s bills.