By Vicki Needham - 10/15/13 11:33 PM EDT
WEDNESDAY'S BIG STORY:
Another day older ...: Another day closer to the debt limit deadline. Time is growing short, desperately short, in fact, for Congress to reopen the government and raise the debt ceiling.
Raising the $16.7 trillion debt ceiling is the most serious concern. Without an increase, the government could run out of money to pay its bills, and that could mean another recession, economists say.
But Senate leaders did provide a ray of hope after a long day of waiting and waiting some more.
"Given tonight's events, the leaders have decided to work toward a solution that would reopen the government and prevent default. They are optimistic an agreement can be reached," said Don Stewart, spokesman for Senate Republican Leader Mitch McConnell (Ky.).
Senate Majority Leader Harry Reid's (D-Nev.) spokesman Adam Jentleson echoed that sentiment.
"Sen. Reid and Sen. McConnell have re-engaged in negotiations and are optimistic that an agreement is within reach."
House Republican leaders were forced to cancel a House Rules meeting, which led to another flurry of gatherings and an "end of the night" proclamation.
The latest measure would have funded the government through Dec. 15 and raised the debt ceiling until Feb. 7.
To try to win over their members, GOP leaders added to a provision that would strip employer contributions lawmakers get for health insurance under ObamaCare so that it also applies to staff.
But, in the end, it didn't fly with conservatives, or with Senate Democrats and the White House.
That leaves Congress without a viable plan heading into Wednesday, a day before the nation is scheduled to run out of borrowing authority.
The Senate had delayed its talks on the hopes that House Republicans could put together a proposal that would pass on the floor Tuesday night.
Instead, it seems lawmakers are back at square one, although Senate Democrats and Republicans have the workings of a plan that might be able to limp to the finish line before a default causes too much damage.
Stock markets were down but not out early in the day, but the Down Jones industrial average dropped about 133 points by day's end on the growing uncertainty. Wednesday could bring more turmoil unless lawmakers can work fast to avoid Thursday's debt-limit deadline.
As it happens, Fitch Ratings on Tuesday evening announced it was putting the U.S. on an increased risk of a default and the nation’s AAA rating on a negative watch.
"Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default," the rater said in a statement.
A House Republican proposal to bar the Treasury Department from deploying “extraordinary measures” to buy more time under its borrowing cap further infuriated Democrats on Tuesday.
The nation hit the debt ceiling in May but a breach has been held off because of those measures. Come Thursday, though, the Treasury will be down to about $30 billion in cash on hand, making it impossible to pay its bills into November.
Treasury Secretary Jack Lew has said the department does not have the ability to prioritize payments.
The business community, the financial industry and international leaders have urged Congress to act to avoid a U.S. default.
Outside experts believe the government could be in danger of a default anytime between Oct. 22 and Nov. 1, and financial firms have been making preparations in case lawmakers can't do it.
MBA Mortgage Index: The Mortgage Bankers Association releases its weekly report on mortgage application volume.
NAHB Housing Market Index: The National Association of Home Builders will release its October survey that gauges builder perceptions of current single-family home sales and sales expectations for the next six months.
Fed's Beige Book: The Federal Reserve releases its October summary on current economic conditions.
WHAT YOU MIGHT HAVE MISSED
— Conservative groups urge 'no' votes on House plan
— Senate leaders' talks suspended to let House Republicans work
— Obama: Boehner 'can't control his caucus'
— Pelosi: House GOP bill is 'decision to default'
— Stocks fluctuate as Congress haggles over a fiscal deal
— Right wants changes to House plan
— Issa: 'I'll vote for a clean CR'
— Reid: House bill DOA in Senate
— Reid says he's 'confident' the Senate will avert default
— Lawmakers stand behind Japanese autos
— Senate's housing finance overhaul could be slowed by government shutdown
— Small businesses warn crisis could dampen holiday sales
— White House warns: 'We're far from a deal'
— Poll: About half believe Congress will resolve debt ceiling on time
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