President Barack Obama called a mid-afternoon meeting of Congressional leaders at the White House Monday.
The call to the meeting came while the Senate’s leaders from both the Republican and Democratic parties met privately at the Capitol for the first time since Saturday in hopes of finding a way to solve the debt and budget crisis that threatens to send the American government into default for the first time in history.
The face-to-face meeting between Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell came after a a Sunday phone call failed to bring an agreement on a deal to raise the government’s borrowing authority on a debt deal.
The current debt limit of $16.7 trillion will be met Thursday and leave the government without necessary funds to meet its obligations unless both sides agree to an increase before then.
Other Senators, part of a group led by Sen. Susan Collins (R-Maine) met for two hours Monday morning in hopes of finding a solution to the deadlock.
“We’re making very good progress, but there’s still many details to be worked out,” Collins said to reporters before the meeting. “We don’t a finished, agreed-upon product yet but I think we had an excellent meeting.”
Collins said the group will meet again later on Monday.
Economists warn financial disaster is looming over the unprecedented government default. The partial government shutdown entered its third week Monday with 350,000 government workers on unpaid leave and another 500,000 working without pay. The Stock Market opened with modest losses Monday, but bond markets are closed for the Columbus Day holiday.
The government shutdowns have halted IRS processing of tax returns and other functions of the government functions. Even though Social Security and other benefit payments continue, they could stop under a government default if the debt limit is not raised.
Reid and McDonnell remain deadlocked over automatic, across the board spending cuts under budget sequestration which went into effect earlier this year. Republicans want the cuts to continue at 2011 funding levels. Democrats want an increase.
Reid said he is “optimistic about the prospects for a positive conclusion to the issues before the country today.”
McConnell ways a solution is “readily available” and he backs the efforts of the bipartisan group led by Senator Collins.
“It’s time for Democratic leaders to take ‘yes’ for an answer,” McConnell said in a statement released by his office.
Democratic Senator Joe Manchin of West Virginia said he is worried about the “skittish” markets, where he added that investors are worried about the prospect of a debt default.
But, he said, “this hasn’t put us on suicide watch yet.”
“The leaders have to come together,” Manchin added.
Republican Senator Lindsey Graham of South Carolina worries that Republicans will lose the most if a deal is not reached.
“We’re in a free-fall as Republicans,” Graham said Monday, “but Democrats are not far behind us.”
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