Senate leaders' talks on shutdown, debt limit stall as sides await market's reaction

Opening a rare Sunday session of the Senate, Majority Leader Harry M. Reid (D-Nev.) said he and Minority Leader Mitch McConnell (R-Ky.) are continuing talks to raise the debt ceiling and reopen the government, but gave no hint of progress in their negotiations.

Were in conversation today, Reid said on the Senate floor. Im confident the Republicans will allow the government to open and extend the ability of the country to pay its bills. And Im going to do everything I can throughout the day to accomplish just this.

With the two sides stuck over whether to leave in place deep automatic spending cuts known as sequestration, Reid stressed that Democrats have agreed to leave the reductions in place into November and suggested they would be open to allowing them to remain in place longer. He noted that was part of a continuing resolution to fund government that has been adopted on a bipartisan basis in the Senate but blocked in the House.

But another round of cuts is set to take effect in January. Democrats have balked at a deal proposed by Senate Republicans that would have opened broader budget talks in coming months but might have allowed that hit to occur in January.

There was one conversation on the Sunday shows today that said we were trying to break the caps set in the budget act, Reid, referring to the 2011 Budget Control Act that put sequestration in motion. We voted differently than that. We voted to extend the [continuing resolution] until November 15. Not a word about breaking caps.

The debate came a day after Senate leaders began negotiations aimed at reopening federal agencies and avoiding a government default after other efforts to end Congresss impasse had crumbled in the previous 48 hours.

Reid and McConnell took over the talks, which led nowhere in recent days. House Speaker John A. Boehner (R-Ohio) acknowledged early Saturday that his discussions with President Obama had collapsed and that the Senate was the last hope to avert a financial disaster.

McConnell and Reid held an hour-long meeting in Reids office with two close Senate allies and left the Capitol by mid-afternoon. Late Saturday night, neither side cited any progress and Republicans reported that Democrats were dug in on their demand to increase funding for federal agencies.

During the fiscal crises that have gripped Capitol Hill over the past five years, each resolution and compromise came after Senate leaders picked up the pieces of failed efforts between the White House and the House.

In the morning session, Reid rejected a proposal crafted by rank-and-file Republicans with some Democratic input to raise the federal debt limit until Jan. 31 and fund federal agencies through the end of March. It also called for minor adjustments to Obamas health-care law .

At an afternoon news conference, Reid said he wanted a shorter period for stopgap funding and a longer extension of the Treasurys borrowing authority. Reid particularly wants to scale back deep automatic spending cuts known as the sequester, which were passed during the 2011 debt-ceiling showdown and will take effect every January for the next decade, unless Congress amends them.

Source: http://www.washingtonpost.com/politics/senate-leaders-begin-to-negotiate-as-other-efforts-to-end-impasse-crumble/2013/10/13/498f4202-341a-11e3-8a0e-4e2cf80831fc_story.html