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Lawmakers were “very close” on Sunday to reaching a last-minute deal that could raise the U.S. debt ceiling by up to $2.8 trillion and assure financial markets that the United States will avoid default, according to NBC News. Prospects that a significant package was within grasp brightened after Republican and Democratic leaders reopened stalled talks with the White House, and Senate Minority Leader Mitch McConnell said he was confident and optimistic.

“I think we’ve got a chance of getting there,” he said on Saturday. “The way this deal is shaped, Congress can avoid BOTH the tax and entitlement fights until 2013,” NBC News’ Chuck Todd said in a tweet. Earlier, a White House official cautioned that a deal was “not there yet.”

Senate Majority Leader Harry Reid, a Democrat, pushed back a key procedural vote on a debt limit plan by 12 hours to 1 p.m. EDT on Sunday, buying additional time for both sides to hammer out details before Asia markets open. “There are negotiations going on at the White House now on a solution that will avert a catastrophic default on the nation’s debt,” Reid said on the Senate floor late on Saturday.

“There is still a distance to go,” he said.

Time is running out for the U.S. government to raise its $14.3 trillion borrowing limit before the Tuesday deadline when the Treasury says it will run out of money to pay its bills and could no longer service the national debt. “We’re a long way from any kind of a negotiated agreement, but there is certainly a more positive feeling about reaching an agreement this evening than I’ve felt in a long time,” Senator Richard Durbin, the No.2 Democrat in the Senate, told reporters late Saturday.

While a White House official told Reuters that no deal had yet been reached, elements of a possible compromise began to emerge near midnight.

Late on Saturday, Reuters laid out these elements of a possible deal:

$2.8 trillion deal. It would raise the debt ceiling by that amount through 2012 and make equal spending cuts.

$1 trillion in cuts would be agreed now.

Special committee appointed by Congress would recommend a second installment of savings of about $1.8 trillion.

If Congress cannot agree on how to implement the cuts recommended by the committee, automatic cuts would be triggered, including reductions in military spending and cost savings to the Medicare health care program for the elderly. Benefit cuts would not be triggered though.

No cuts in Social Security.




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