By Justin Sink - 10/14/13 07:52 PM EDT
President Obama has postponed a Monday meeting with congressional leaders at the White House to give senators time to reach a deal that could end the government shutdown and raise the debt ceiling.
A deal discussed by Senate leaders would extend funding for the government through Jan. 15 and raise the debt ceiling until Feb. 15.
Obama had been scheduled to meet at 3 p.m. with House Speaker John Boehner (R-Ohio), House Minority Leader Nancy Pelosi (D-Calif.), Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.).
But that meeting has been put on hold "to allow leaders in the Senate time to continue making important progress towards a solution that raises the debt limit and reopens the government," the White House said.
The delay is being seen as a positive sign for the talks, particularly given positive statements made by McConnell and Reid about their talks on the Senate floor.
The two leaders huddled for 30 minutes Monday morning. Asked afterward whether they would have an agreement to present to Obama, Reid said, “[I] sure hope so.”
“We’re working on everything,” Reid said. “We continue to work on it. It’s not done yet.”
McConnell said he and Reid have had some “very constructive exchanges of views” in recent days.
“I share his optimism that we’re going to get a result that will be acceptable to both sides,” McConnell said.
A spokesman for Speaker John Boehner (R-Ohio) said Boehner had gone to McConnell to be briefed on the negotiations.
Any deal approved by the Senate would still have to be passed by the House, where it would likely face some opposition from conservative Republicans.
That could force Boehner to make a decision about bringing a measure to the floor without the full support of his conference, in the hopes Democrats would back it.
The stock market, which had begun to plunge Monday morning, rebounded early in the afternoon as positive signs emerged in the budget talks. But the reopening of the bond market Tuesday morning could be tumultuous if lawmakers fail to reach an agreement.
At a Washington, D.C., food pantry Monday, Obama said that he hoped "that a spirit of cooperation will move us forward over the next couple of hours."
"I think there has been some progress on the Senate side with Republicans recognizing it's not tenable; its not smart; its not good for the American people to let America default," Obama said.
Obama warned that if there were no compromise from Republicans, the U.S. could default on its debts.
“This week, if we don’t start making some real progress — both the House and the Senate — and if Republicans aren’t willing to set aside their partisan concerns in order to do what’s right for the country, we stand a good chance of defaulting, and defaulting could potentially have a devastating affect on our economy,” he said.
Democrats are pushing for a shorter-term spending bill that would reopen the government, coupled with a long-term extension of the debt ceiling. That would allow Democrats to push for a repeal of the automatic cuts from sequestration in the near future.
Republicans, meanwhile, are touting a proposal from GOP Sen. Susan Collins (Maine) that would keep the sequester in place but allow greater discretion in how it was applied. Her plan would also raise the debt limit and change some aspects of ObamaCare.
Democrats have thus far rejected the Collins plan, although lawmakers from both sides of the aisle have indicated that it could serve as the basis for a final agreement.
Republicans said the talks Sunday had stalled because Democrats were seeking an end to the spending cuts from sequestration.
The original Collins plan would fund the government for six months at an annualized rate of $986 billion, pushing the next deadline for a government funding bill to the spring.
That plan would virtually ensure that another round of automatic sequester cuts take effect Jan. 1, and Democrats fear they would have little leverage to reverse them.
Centrist senators signaled Monday that an agreement to end the fiscal impasse could be within reach.
Collins on Monday said senators were “making progress” toward a deal, though they’re “not there yet.”
“We're going to continue to meet throughout the day. And the conversations have been very constructive. We're not going to release any details until we have an agreement. I hope we will have an agreement,” Collins said.
Sen. Joe Manchin (D-W.Va.), who has been involved in bipartisan negotiations with Collins, told CNN lawmakers were 70 percent to 80 percent of the way toward an agreement.
Lawmakers are scrambling to raise the debt ceiling before the Thursday deadline. Treasury Secretary Jack Lew says the government’s borrowing authority would be exhausted on that day, leaving the nation at risk of default.
“There is a lot of concern about whether we’re going to meet this deadline; I think at the end of the day, we will," Sen. Bob Corker (R-Tenn.) told NBC News Monday. "But to do so, we really have to move ahead today with a Senate agreement, and then the House has got to be open to focusing on those things that make our country stronger, which is spending restraints."
Sen. Jon Tester (D-Mont.) told CNBC he’s optimistic that senators will find a way out.
"I feel more hopeful now than I have since Oct. 1," Tester said. “I think both Harry [Reid] and Mitch [McConnell] are talking, and I think it's going to result in something good."
— Alexander Bolton and Russell Berman contributed.
— This story was posted at 12:07 p.m. and was last updated at 3:52 p.m.