With House leaders unable to reach an agreement within their own Republican caucus, Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) have now taken the lead on a short-term increase in the national debt limit and short-term funding bill to end the government shutdown.
Reid and McConnell had announced an agreement on Monday, but that was put on hold after Speaker of the House John Boehner announced that the House would work on their own agreement. Late Tuesday, though, Boehner emerged from a meeting with his caucus to announce that they were unable to come to any agreement that could pass the House. That put a path forward back into the hands of McConnell and Reid.
The McConnell/Reid plan was being finalized Tuesday night and, if all goes as planned, will be voted on Wednesday, just one day before Thursday's debt limit deadline.
Under the agreement, the government would be funded until Jan. 15, the debt limit would be raised enough to get to Feb. 7, and a bipartisan conference committee would be created to come up with a longer term budget agreement by Dec. 13. The bill would also require income verification from those who receive subsidies to purchase health insurance under the Affordable Care Act, or "Obamacare," a provision that was orginally in the ACA when it was first passed by Congress but was removed by the Obama administration.
Reid sounded optimistic. "I think things are going to be good," he told CNN's Dana Bash as he left the capitol late Tuesday.
Due to Senate debate rules, the final bill may not be passed until early next week, which means the Treasury Department would hit the debt limit and would have to delay some payments. If it is clear that an agreement has been reached, though, and the delay is only procedural, the markets are unlikely to get spooked.
A bill could conceivably get passed Wednesday with a unanimous consent agreement, which means every senator would have to agree to it. If even one senator objects to unanimous consent, Reid would have to schedule a cloture vote to end debate, which would require 60 votes. Then the final vote on passage could come after 30 hours of debate.
The House would be able move more quickly. Passage in the House could come with a majority of Democrats voting yea along with a minority of Republicans. This would break the informal "Hastert rule," which says that no bill should pass without a majority of the majority party supporting it.