US senators expressed hope that a bipartisan deal could emerge today to end Washington’s fiscal crisis even as Republicans in the House of Representatives said they were working on a separate plan.
Even if Democrats and Republicans agree, it could be tomorrow before the US Senate signs off on a plan, senators said, close to a Thursday deadline when the Obama administration says it will reach its borrowing limit and risk default.
Republicans in the House of Representatives were discussing an alternative plan that includes measures that would affect President Barack Obama's healthcare reforms, which have been at the heart of the crisis.
Congressional sources said that the two sides in the Senate were still at odds over Democrats’ demand for a delay in an insurance fee that is part of the new healthcare reforms, which are known widely as Obamacare.
Thursday is the deadline for raising the debt ceiling to extend the government's borrowing authority. The Obama administration says it will be unable to pay all of its bills if Congress does not raise the $16.7 trillion debt limit by then.
The federal government has been in partial shutdown since October 1 when Congress missed the deadline for funding it.
Conservative Republicans prompted the crisis, which has rattled global markets, by demanding major changes to the healthcare reforms as a condition of passing a government spending bill and raising the debt ceiling.
One senior Senate aide said that under the Senate plan being negotiated, the Treasury Department would maintain its ability to use "extraordinary measures" to manage debt payments if a February 7, 2014 deadline for raising US borrowing authority is missed by Congress.
The US government shutdown is beginning to weigh on the economy. The hundreds of thousands of federal employees who have been temporarily thrown out of work are likely to get back-pay when the standoff is resolved. But they are not getting paid now, forcing many to cut back on personal spending and cancel holiday travel plans.
The crisis is only the latest in a series of budget battles in recent years that have spooked investors and consumers.
The uncertainty has weighed on the economy and boosted the unemployment rate by 0.6 of a percentage point, or the equivalent of 900,000 jobs since late 2009, according to a new estimate by the Peter G Peterson Foundation, a think tank.