US lawmakers voiced tentative optimism yesterday that fiscal crisis talks between Senate leaders would pave the way to a deal to avert a government default and reopen the government, but Democrats and Republicans remained far apart on details.
As the clock ticked down to a Thursday deadline for raising the US debt ceiling, necessary to avoid a possible government default that would rock world financial markets, both Democratic and Republican senators said the fact their leaders were meeting represented progress.
“It’s a breakthrough. Hard to imagine, but it’s a breakthrough,” Dick Durbin, the second-ranking Democrat in the Senate, told NBC’s Meet the Press programme.
“The conversation that started yesterday between Senator (Mitch) McConnell – the Republican Senate leader – and Senator (Harry) Reid I think has the promise of finding a solution,” he said.
Reid, the Senate majority leader, and McConnell held an initial session on Saturday and met again yesterday.
Saturday’s meeting, however, failed to dispel uncertainty about their ability to reach an agree-ment quickly to end a partial government shutdown and increase the nation’s bor-rowing authority.
Durbin offered no concrete reason for optimism, stressing the dire consequences of failure and his hope that “sensible people prevail” in a crisis that began with a partial government shutdown on October 1.
“I don’t want to be overly optimistic, but there’s a lot at stake,” said the Illinois Democrat.
Ohio Republican Senator Rob Portman said he also expected the two sides could reach a deal by Thursday. Appearing on CNN’s State of the Union, Senators Susan Collins, a Republican, and Amy Klobuchar, a Democrat, agreed that a solution will be reached by Reid and McConnell before Thursday. Among the unresolved issues are the duration of the debt ceiling increase and the level of spending Congress will approve when it finally agrees on a bill to reopen the government.
Democrats are attempting to use the negotiations to raise spending above the levels authorised by the “sequester” – stringent across the board budget cuts that took effect in March, with more reductions set for January.
Lawmakers are also scrambling to put hundreds of thousands of federal employees back to work after their failure to fund the government resulted in the partial shutdown.
Washington’s debt ceiling drama played out as anxious global financial leaders gathered in the US capital for annual meetings of the International Monetary Fund and Group of 20 major industrialized and emerging economies.
World Bank President Jim Yong Kim on Saturday warned the United States was just “five days away from a very dangerous moment” unless politicians produce a plan to avoid default.
“If this comes to pass, it could be a disastrous event for the developing world, and that will in turn greatly hurt developed economies as well,” he told reporters.