Economists see greater financial danger from an historical default. Christine Lagarde, the International Monetary Fund's managing director, spoke fearfully about the disruption and uncertainty, warning on Sunday of a "risk of tipping, yet again, into recession" after the fitful recovery from 2008.
Reid and McConnell — five-term senators hardened by budget disputes and years of negotiations — are at an impasse over the automatic, across-the-board spending cuts known as sequestration and whether to undo or change them as part of a budget deal. Republicans want to keep the spending at the deficit-cutting level of the 2011 budget law while Democrats are pressing for a higher amount.
"I'm optimistic about the prospects for a positive conclusion to the issues before this country today," Reid said as the Senate wrapped up a rare Sunday session.
McConnell insisted a solution was readily available as he embraced the proposal from a bipartisan group of 12 senators, led by Collins and Manchin, that would re-open the government and fund it at current levels for six months while raising the debt limit through Jan. 31.
It also would give agencies greater flexibility in dealing with the automatic budget cuts, delay the medical device tax for two years and establish income verification for individuals receiving subsidies to buy health insurance.
"It's time for Democrat leaders to take 'yes' for an answer," McConnell said in a statement.
"This haven't put us on suicide watch yet," Manchin joked Monday morning, "but they're concerned about us."
He said, "The leaders have to come together" and decide what time frame a stopgap spending bill would cover and how much it would cost.
Tennessee's Sen. Bob Corker, a Republican, said the leaders of both parties need to be "getting on the same page."
McConnell and Republicans want to continue current spending at $986.7 billion and leave untouched the new round of cuts on Jan. 15 that would reduce the amount to $967 billion. Democrats want to figure out a way to undo the reductions, plus a long-term extension of the debt limit increase and a short-term spending bill to reopen the government.
"Republicans want to do it with entitlement cuts," said Sen. Chuck Schumer, D-N.Y. "Democrats want to do it with a mix of mandatory cuts, some entitlements and revenues. And so how do you overcome that dilemma? We're not going to overcome it in the next day or two."
He suggested keeping the government running through mid-January.
Sen. Dick Durbin of Illinois, the No. 2 Democrat in the Senate, told reporters the two sides are roughly $70 billion apart, the difference between the $1.058 trillion Senate budget amount and the $988 billion envisioned by House Budget Committee Chairman Paul Ryan, R-Wis.
"We haven't picked a number, but clearly we need to negotiate between those two," Durbin said.
Republicans dismiss the latest request as Reid moving the goalposts in negotiations as they were getting closer to resolving the stalemate that has paralyzed Washington. They also argue that it is disingenuous for Democrats to resist any changes in the 3-year-old health care law while trying to undo the 2011 budget law that put the cuts on track.
Unclear was whether any Senate deal would pass the Republican-controlled House by Thursday, though Senate Democrats were hoping momentum and an imminent default would pressure House lawmakers.
Corker was interviewed on NBC's "Today" show Monday and Manchin appeared on Fox News Channel and MSNBC.
- AirAsia plane carrying 162 lost in stormy...
- What the Senate’s tax break extensions...
- Yes-We-Can president faces twilight of maybes
- Heroes 2014: Meet the disruptive visionary...
- Police outside cop funeral turn backs on NYC...
- Box Office: 'Hobbit' wins Christmas, 'Big...
- Largest quarterly GDP growth since 2003...
- Missing AirAsia flight requested to change...
- Obama 's Christmas in Hawaii: Carols,... 16
- Yes-We-Can president faces twilight of... 14
- On Christmas, Obama marks end of Afghan... 12
- Officer kills armed 18-year-old near... 11
- N. Korea compares Obama to monkey in... 9
- Senate, CIA agree torture program was... 7
- Sony announces limited release for 'The... 5
- Jeb Bush to step down from Tenet... 5