Washington - Talks inched ahead three days before a possible US default, with Senate Republicans resisting Democratic calls to ease the sequester cuts' next round.
"Our discussions were substantive," Majority Leader Harry Reid, D-Nev., said in a rare Sunday Senate session after talking by phone with Minority Leader Mitch McConnell, R-Ky.
"I'm optimistic about the prospects for a positive conclusion," Reid said before suspending public proceedings until 2pm Monday while backroom talks intensified.
The Treasury Department says it will exhaust its borrowing power on Thursday, leaving it with $30 billion in cash to pay the government's bills, an amount that could run out a week or two later.
Lawmakers are trying to reach agreement to raise the nation's debt ceiling, or statutory borrowing limit, currently at $16.7 trillion, and end the partial government shutdown that started October 1, with the new fiscal year.
Despite Reid's words of optimism, Republicans said any budget and debt deal could not back away from the across-the-board spending cuts known as the sequester.
They said such a measure would be opposed by GOP senators and doomed in the Republican House.
Democrats say they want to replace some of the sequester cuts with a broader budget agreement that includes tax-revenue increases and cuts in entitlement programs.
"We know that come 10 years from now, Medicare is not sustainable financially," Sen. Dick Durbin of Illinois, the second-ranking Democrat, told NBC's "Meet the Press." "We've got to do something."
Democrats objected during the weekend to a debt-limit plan developed by Sen. Susan Collins, R-Maine, because it would maintain sequestration-level spending of $988 billion through March, permitting another round of sequester cuts to hit January 15.
The sequester cuts are part of $2.1 trillion in spending cuts over 10 years included in the federal Budget Control Act, which raised the debt limit in August 2011.
Republicans at first wanted to replace the sequester too, particularly the part that cuts defence spending.
But after President Barack Obama won tax hikes on the wealthy as part of a fight that ended 2 a.m. New Year's Day over the "fiscal cliff" that delayed sequestration until March and didn't change the debt ceiling, McConnell has called the sequester a major GOP victory and said the party will not retreat from it, The Washington Post said.
McConnell said Sunday the automatic, mandatory sequester cuts in the Budget Control Act -- which he called "the law of the land" -- were fundamental and necessary to maintaining "the commitment that Congress made to reduce Washington spending".
He said Collins' proposal was a "bipartisan plan" that had "the support of Democrat and Republican senators".
"It would reopen the government, prevent a default [and] provide the opportunity for additional budget negotiations around Washington's long-term debt," besides maintaining sequestration's budget cuts, he said.
The five Democrats and one Democratic-leaning independent working with Collins on her proposal immediately issued a statement contradicting McConnell, saying they hadn't signed on to Collins' plan.
"We have been involved in productive, bipartisan discussions with Senator Collins and other Republican senators," the statement said, "but we do not support the proposal in its current form."
"There are negotiations, but there is no agreement," Sens. Joe Donnelly of Indiana, Heidi Heitkamp of North Dakota, Angus King of Maine, Amy Klobuchar of Minnesota, Joe Manchin of West Virginia and Mark Pryor of Arkansas said in the statement.
The Wall Street Journal said Reid countered Collins' proposal in his call with McConnell.
Reid's idea was to continue spending at current levels until mid-December, set up a mechanism for negotiating the sequester cuts and other budget matters for the rest of the year, and extend the debt limit for about six months, sources familiar with the talks told the newspaper.
It wasn't immediately clear what McConnell's response was. – SAnews.gov.za-UPI
