But it was unclear whether a deal struck by Senate Majority Leader Harry M. Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) could pass the Senate before the Treasury Department exhausts its borrowing power Thursday.
Meeting that deadline would be impossible if Sen. Ted Cruz (R-Tex.) or other conservative hard-liners chose to throw up roadblocks, Democrats said. Republican leaders were leaning on Cruz and his allies to avoid unnecessary delays.
“The clock is ticking,” said Sen. John Thune (R-S.D.), the No. 3 Republican in the Senate. “Given the consequence of what we’re talking about here, . . . I would hope that we would have genuine interest among all parties in terms of trying to get this done as quickly as possible.”
Any deal would also have to win approval in the House, where Speaker John A. Boehner (R-Ohio) and his leadership team had once again lost all control of their majority. After a long day of trying with increasing desperation to cobble together a debt-limit plan that could win the support of 217 Republicans, Boehner and his top deputies gave up and abruptly canceled a scheduled vote on the measure.
(Related: Who controls the House GOP? No one.)
On Tuesday evening, they left the Capitol without further plan or explanation.
“We are done for the night,” a weary Majority Whip Kevin McCarthy (R-Calif.) said as he left a marathon session in Boehner’s office that began as an airing of complaints from rebellious conservatives and soon ballooned into a full-blown emergency session of senior lawmakers and committee chairmen.
The chaos on Capitol Hill was already reverberating through the financial world. U.S. financial markets closed down slightly Tuesday, while Fitch Ratings, the third-largest credit-rating agency, took a step toward a potential downgrade of the government’s AAA rating. Fitch warned that “political brinksmanship and reduced financing flexibility” were elevating the risk of default.
Unless Congress acts by Thursday, Treasury Secretary Jack Lew will be left with just $30 billion in cash and a fluctuating flow of incoming tax revenue to pay the nation’s bills. While Lew is unlikely to begin missing payments immediately, independent analysts say he would run short of funds no later than Nov. 1.
Sen. Richard J. Durbin (D-Ill.) told reporters that aides to the two Senate leaders would work through the night to finalize details of the emerging Senate measure. “They had a basic agreement,” Durbin said of Reid and McConnell. “All pointing in the right direction.”