Updated at 6:3e0 a.m. edt
Democrats and Republicans yesterday agreed to a $1 trillion deal for starters to settle the debt crisis that threatened to tank the global economy.
The Congress and White House are expected to vote today for the deal that will raise the $14.3 trillion federal debt limit.
Updated at 3:30 p.m. edt
The Senate killed a Democratic debt reduction bill on a procedural vote this afternoon, but do-or-die talks jump-started overnight has leaders on both sides cautiously optimistic a deal can get done to avoid a default by a Tuesday deadline.
A 50-49 vote failed to end a GOP filibuster, as Democrats fell 10 votes short of the 60 needed to move Senate Democratic Harry Reid's bill to a final vote. It was seen mostly as a symbolic vote, since it was expected to fail.
All hope of beating the clock and raising the $14.3 trillion debt limit comes down to $3 trillion in spending cuts being negotiated by Senate GOP leader Mitch McConnell and President Obama.
"Despite all the reporting, no deal has been reached, there are still (important) issues to work out, and a lot of bad info is floating out there," White House Communications Director Dan Pfeiffer said in an early afternoon Twitter dispatch.
Democratic leaders from both chambers huddled in House Democratic leader Nancy Pelosi's office to plot their strategy. Outside that session Reid told reporters, deal is "a lot closer than yesterday but we still have a ways to go."
Some House Democrats were concerned that Obama would give away too much in his negotiations, and then ask them to help pass a lousy deal. "We've carried his water before, but sooner or later we'll drop the bucket if he keeps playing us like a patsy," said a senior House Democratic staffer.
Some Demnocreats are still miffed at Obama for deciding against letting the Bush-era tax cuts for the wealthiest Americans expire in the budget negotiations last December, arguing that it would help spur the economy by continuing to give the richest Americans a free ride. Those Democrats note the economy is worse now than it was then.
On the morning talks shows, McConnell explained the framework of a deal would include two waves of spending cuts, but would avoid a messy vote and replay of this ordeal over the holidays, as House Speaker John Boehner had wanted.
The first wave of cuts would include $1 trillion in set-in-stone reductions to discretionary spending, but a bipartisan "super congressional committee" would need to determine the second round of cuts by Thanksgiving of 2012.
There would be automatic "trigger" with cuts to the Pentagon and entitlements if Congress does not act on the super committee's recommendations.
With a Tuesday deadline looming, Democratic and Republican negotiators made strides overnight on a potential $3 trillion debt-reduction deal, Senate GOP leader Mitch McConnell said this morning.
"We're very close," McConnell said on CNN's "State of the Union" program, predicting a deal could be reached "soon."
The framework includes cuts in discretionary spending and caps on spending increases over 10 years, McConnell said. It calls for creation of a bipartisan debt-cuttting committtee made up of lawmakers, and includes a provision agreeing to a separate vote on creating a balanced-budget amendment to the constitution, he said.
The White House has said a deal must scrap the House GOP plan that calls for another debt debate and a vote in six months. "We're working on the accommodations that will get us there," McConnell said.
Sen. Chuck Schumer (D-N.Y.), the No. 3 Democrat in the Senate, cautioned that there is no deal as of yet, but he is very optimistic that the U.S. will not for the first-time ever default on its loan payments.
An apparent breakthrough came after Senate Democratic leader Harry Reid agreed to delay a 1 a.m. edt vote on his debt-reduction resolution in order to give negotiators time to see if they could move their talks forward. Reid rescheduled the vote for 1 p.m. today, but if a deal is close he may be persuaded to back up the vote again and amend or replace his legislation.
The hard part may come after a deal is reached. Even if the leaders have an agreement they still have to sell it to their rank and file, including the obstructionist Tea Party faction and contentious House liberals.