He offered few hints of the shape of the unfolding deal, except to say he was confident it would raise the debt limit sufficiently to avoid revisiting this sort of stalemate before the 2012 elections. “There is still a distance to go before any arrangement can be completed,’’ he said.
US Treasury officials have said the country will not have enough money after Tuesday to pay all of its bills, including Social Security and veterans’ benefits.
Economists predict markets could turn volatile before then - at tomorrow’s opening bell - without a deal in place. Lucas Papademos, visiting professor of public policy at Harvard’s Kennedy School of Government, said there could be an “abrupt and significant’’ market reaction.
“I would expect it to be considerable,’’ Papademos, also an economist, said yesterday. “Such an event is not expected by a majority of market participants.’’
There seemed to be glimmers of a breakthrough during the day, as Republicans reached out to President Obama to rejoin the talks.
“We are now fully engaged, the speaker and I, with the one person in America, out of 307 million people, who can sign a bill into law,’’ Senate minority leader Mitch McConnell said. “I’m confident and optimistic that we’re going to get an agreement in the very near future and resolve this crisis in the best interests of the American people.’’
But those hopes seemed dashed early yesterday evening as Reid, a Nevada Democrat, again accused Republicans of blocking progress on a deal and not negotiating in good faith.
Reid had started the day with a framework for compromise that would cut $2.2 trillion in spending while raising the debt limit by $2.4 trillion, enough to cover spending into 2013.
But McConnell dealt him a setback almost immediately, presenting him with a letter signed by 43 Republican senators saying they would not sign on to the bill. The measure would need support from at least three of those senators last night to reach the 60-vote margin needed to end an anticipated GOP filibuster and bring it to a vote.
