The U.S. Senate prepared for a last ditch effort Wednesday to avoid a historic lapse in the government's borrowing authority, a breach that President Barack Obama has said could lead to default and deliver a damaging blow to the global economy.
After a day of stop-and-go negotiations, the top Democrat and Republican in the U.S. Senate were said to be close to agreeing on a proposal to raise the debt limit - and reopen the partially shuttered government - for consideration by the full Senate on Wednesday.
The measure's fate remained uncertain in the fractured Republican-controlled House of Representatives, which failed twice Tuesday to produce its own plan.
The Senate was scheduled to meet at 11 a.m. Wednesday, and the House at 9 a.m. Chicago time.
With borrowing authority set to run out on Thursday, Senate Majority Leader Harry Reid and Republican leader Senator Mitch McConnell "are very close" to an agreement, Representative Chris Van Hollen, a top House Democrat, told MSNBC late Tuesday night.
"This is now back on track," Democratic Senator Heidi Heitkamp told CNN late on Tuesday, after a day of chaotic developments that frayed the nerves of many members of Congress and global financial markets.
McConnell and Reid resumed stalled talks after a roller coaster day that saw two separate legislative efforts in the House buried after it became apparent too many Republicans were rebelling against their leaders' plans.
Following weeks of bitter fighting among Democrats and Republicans, the layoff of hundreds of thousands of federal workers and turmoil for stock markets, the deal under discussion - if eventually enacted - would basically give President Barack Obama what he has demanded for months: A straight-forward debt limit hike and government funding bill.
The deal would extend U.S. borrowing authority until Feb. 7, although the Treasury Department would have tools to temporarily extend its borrowing capacity beyond that date if Congress failed to act early next year.
With the final details not yet nailed down, as it stood Tuesday night, the agreement envisioned funding government agencies until January 15, ending a partial government shutdown that began with the new fiscal year on Oct. 1.
Asian stock markets were listless in early trading on Wednesday as they waited to see if Washington was closing in on a deal to resolve the debt crisis. Stocks showed little change and remained near a five-month peak.
Senate aides said the two leaders are looking at two possible ways of speeding the legislation through the chamber, which often can bog down for days with procedural hurdles.
Senator Dick Durbin, the second-ranking Senate Democrat, told reporters: "In order to move this quickly tomorrow or as soon thereafter as possible, we need cooperation of members. If they want to drag their feet, use every objection they can, this could take a few days."
Under one scenario, all 100 senators would agree to let Democrats schedule quick votes to pass the bill. That would mean that Tea Party firebrands, such as Republican Senator Ted Cruz, would give up their rights to delay a vote.
Cruz has not publicly announced his intentions but some Senate aides think that the Texas freshman with presidential aspirations has been sending positive signals in recent days.
Cruz and fellow Tea Party activists late last month delayed passage of a government funding bill as they demanded major changes to Obama's landmark healthcare law.
The deadlock led to federal agency shutdowns as Obama and his fellow Democrats stood firm against changing the law.
The other scenario would have the House send a formal "message" to the Senate to pave the way for quick Senate action, according to a Senate aide who asked not to be identified.
Again, it was not clear whether House Republicans would go along with that option.