ABC News' Tahman Bradley reports:
With just two days left before Uncle Sam’s credit card maxes out, there were a few signs Saturday afternoon that Republicans and Democrats may be closer to ending the standoff over the nation’s debt ceiling. The Republican leader in the Senate, Mitch McConnell, expressed confidence that a deal could get done before Tuesday’s deadline.
“I've spoken to both the president and the vice president within the last hour. We're are now fully engaged,” said McConnell. “I'm confident and optimistic that we're going to get an agreement in the very near future and resolve this crisis.”
House Speaker John Boehner signaled that he too thinks a deal can get done. “In spite of our differences, I think we're dealing with reasonable, responsible people who want this crisis to end as quickly as possible, and I think we will,” he said.
President Obama spoke with Boehner Friday night, the same evening that the House passed a $900 billion debt reduction bill that Boehner proposed.
It took a few days for the speaker to round up enough Republican votes to pass the bill even though the GOP controls the House chamber. Many of the House’s conservative Tea Party members do not support increasing the nation’s debt ceiling without fundamentally changing how Washington does business.
The Boehner-backed bill passed the House Friday by a vote of 218 to 210 with every Democrat voting against it and 20 Republicans joining them.
Boehner added a balanced budget amendment after postponing a Thursday vote. Once it got the Senate, Democrats moved to quickly to kill the bill, so that Senate Majority Leader Harry Reid could introduce his own plan to raise the debt ceiling.
Before the Senate could vote on the Reid bill, the House of Representatives voted Saturday to defeat the substance contained in Senate Majority Leader Harry Reid' s plan.
Before the vote, the Obama administration said it hoped the Reid plan would pass. In a statement, the Obama administration said, "If the bill were presented to the president, his senior advisors would recommend that he sign it."
The Reid plan contains about $2.4 trillion in cuts and would raise the debt ceiling until 2013. Republicans have said one of their main issues with the legislation is that Reid is counting on saving $1 trillion by winding down the Iraq and Afghanistan wars. Republicans describe Reid's math as an "accounting gimmick.”
Democrats close to the negotiating process say the hunt is on now for the “sweet spot” between the Reid and Boehner bills, the place where politically a deal can be struck.
The Boehner and Reid bills have some similarities. They both contain budgets cuts greater than the debt ceiling increase amount and both would create a congressional committee to recommend more cuts within a year.
The political brinksmanship comes as the economy sends up distress signals. The Dow Jones has been down for six days straight, taking with it $183 billion in American’s retirement accounts and new figures show the economy grew a feeble 1.3 percent in the quarter ending June 30.
After meeting with President Obama at the White House, Sen. Reid seemed a little frustrated with where the process is. “The question is: are we closer to an agreement. The answer is no.”
Meanwhile, Sen. Kent Conrad, a Democrat from North Dakota, and a member of the so-called Gang of Six, is working behind the scenes on the Hill today to summon up a compromise amendment that could be offered as a supplement to the Reid proposal.
The hope is that what he proposes would be amendable to more Republicans. Conrad said he is confident that the compromise amendment could get 60 votes in the Senate – the number that would be needed to prevent a filibuster.
ABC News’ Sunlen Miller and Jake Tapper contributed to this report.