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Debt limit deal in veteran pair's hands

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David Lightman

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'Open the government, let us pay our bills'

Efforts to end the US government shutdown and to prevent a default shifts to the Senate, after they rejected a Democratic effort to raise the debt ceiling.

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With less than a week to go until the federal government faces a historic default, talks between the White House and House of Representatives Republicans have broken down, leaving the fate of a deal in the Senate's hands.

The future of any compromise has shifted largely to two wily veteran negotiators, the Democrats' Senate majority leader, Harry Reid, and Republican leader Mitch McConnell. They met in Washington on Saturday for the first time to discuss a way forward.

''The conversations were extremely cordial but very preliminary, of course. Nothing conclusive but I hope that our talking is some solace to the American people and the world,'' said Senator Reid. He added that any deal was ''a long ways away''.

'Preliminary' conversations: Harry Reid, right, with fellow Democratic senator Chuck Schumer,  says a deal is "a long ways away".

'Preliminary' conversations: Harry Reid, right, with fellow Democratic senator Chuck Schumer, says a deal is "a long ways away". Photo: Getty Images/AFP

Senate Democrats, though, offered a less optimistic take after Senator Reid and others talked strategy at the White House with President Barack Obama for more than an hour.

A Senate Democratic leadership aide said Mr Obama and the senators agreed that talks between Senate Democrats and Republicans should continue, but that the Democratic position remains the same: ''Democrats are willing to negotiate on anything Republicans want to discuss, as soon as we reopen the government and pay our bills.''

The government is expected to reach its debt limit this Thursday, and parts of the government have been closed since the beginning of the month.

Guardedly hopeful: Senate Minority Leader Mitch McConnell.

Guardedly hopeful: Senate Minority Leader Mitch McConnell. Photo: AP

While Senator Reid and Senator McConnell were polite and guardedly hopeful, most of those at the Capitol were glum. The momentum that had been building all week fizzled, and the day was marked by round after round of public finger-pointing and posturing.

The gloom was triggered when Mr Obama essentially rejected a House Republican debt limit plan.

House of Representatives Speaker John Boehner acknowledged that his discussions with Mr Obama had collapsed and that the Senate was the last hope to avert a financial disaster.

During the fiscal crises that have gripped Capitol Hill over the past five years, each resolution and compromise has come after Senate leaders picked up the pieces of failed efforts between the White House and the House of Representatives. But the slow-moving talks appear to have dashed earlier hopes that at least an outline for a deal could be in place before the financial markets opened in the US on Monday, as some senior senators had earlier suggested.

Even if an agreement is reached soon, time will become a factor. Unless senators agree to expedite the process it will take until at least late in the week to clear the Senate.

The bill would then go to the House, where it would face an uncertain fate.

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