Senate leaders close in on potential budget deal, as deadline looms

Senate negotiators are said to be close to announcing a potential budget deal, Fox News has learned, after they scrambled to restart talks following the collapse of a plan in the House of Representatives. 

Senate Majority Leader Harry Reid and House Democratic Leader Nancy Pelosi spoke Wednesday morning, Fox News has learned. Senate Republican Leader Mitch McConnell is also involved in the talks. 

The House could also be preparing to move the measure quickly, with a Thursday deadline to raise the debt ceiling looming. 

On Tuesday, House Republicans failed to move on an alternate budget plan. House GOP leaders, after initially planning to vote on their plan sometime before midnight, shelved the proposal after leaders struggled to round up the votes. "It is over," one GOP aide told Fox News late Tuesday. 

With that decision, focus shifted back to the Senate and talks between Reid and his Republican counterpart, McConnell.

A spokesman for Reid issued a statement late Tuesday saying, "Senator Reid and Senator McConnell have re-engaged in negotiations and are optimistic that an agreement is within reach."

The emerging framework on the Senate side would raise the debt ceiling through February, and include a spending bill meant to last through Jan. 15. That version would not include any provision relating to the ObamaCare medical device tax, as prior plans did; instead it would include a single provision meant to verify the income of those receiving ObamaCare subsidies. 

Amid discontent on the House side, conservatives were also unhappy with the Senate version and raised concerns that Senate Republicans would go along with it. 

But with House Speaker John Boehner losing support for the latest House plan, the odds increased that the chamber could be left taking up whatever the Senate might send over. 

Some Democrats urged Republicans to throw in the towel. "You have two options -- you can get bowled over by the Senate or you can get bowled over by the Senate," said one House Democratic aide. 

Senate negotiators, though, would still have to produce a plan, which they haven't yet. They are racing against a Thursday deadline to raise the debt ceiling. 

While the Senate had originally been crafting a bipartisan bill to address the budget impasse, House Republicans surprised Senate negotiators earlier Tuesday when they announced they were pursuing their own framework. Moving quickly, Boehner's office announced late Tuesday afternoon that the chamber would vote by the end of the night.

But a vital meeting of the House Rules Committee, which prepares bills for the floor, was then postponed -- a signal that House leaders were lacking the necessary votes.

Fox News is told that a decision by conservative group Heritage Action to come out against the emerging bill drove some Republicans to oppose the plan -- and helped sideline the proposal. Others said GOP leaders were losing votes on the plan even before the Heritage Action statement came out. 

Heritage Action complained that the House plan would "do nothing" to stall "massive new entitlements" in ObamaCare.

The revised House plan was aimed at both ending the partial government shutdown and raising the debt ceiling, but also imposing one ObamaCare-related provision.

Though Republicans have considered over the last several weeks a range of provisions relating to ObamaCare, the one they settled on in this package would force Congress, the president, and many other administration officials and staff onto ObamaCare without additional subsidies. GOP lawmakers described the proposed mandate as a matter of "fairness."

"If the president and Senate Democrats are going to force the American people to live under ObamaCare, then they and all Washington leaders should not be shielded from the law," one GOP aide said.

The House plan also would have ended the partial government shutdown by funding the government through Dec. 15. And it would also raise the debt ceiling through Feb. 7 -- in turn averting the looming Thursday deadline to raise the debt cap.

Republicans earlier claimed the details of their plan were not so far off from a bipartisan approach being crafted in the Senate. Republicans urged Democrats to give it a chance, and questioned why they would preemptively reject it.

"To say, 'absolutely categorically not, we will not consider what the Republicans in the House of Representatives are doing,' in my view, is piling on," Sen. John McCain, R-Ariz., said on the Senate floor, as Democrats lined up against the House plan. "Let's sit down and work this out."

The mood in Washington has shifted drastically in the last day, with both sides of the aisle hurling accusations at one another when, the night before, bipartisan leaders in the Senate were claiming on the floor to have made significant progress.

White House spokeswoman Amy Brundage called the House approach a "partisan attempt to appease a small group of Tea Party Republicans who forced the government shutdown in the first placeSenate leaders close in on potential budget deal, as deadline looms