WASHINGTON - With House Republicans blaming President Barack Obama for the collapse of talks on extending US borrowing authority, the Senate scrambled Saturday to piece together a bipartisan exit strategy.
The eyes of the world are glued on Washington as politicians grapple with how to reopen the shuttered government and avoid a potentially calamitous failure to pay the country's obligations for the first time ever, which experts warn would send shockwaves through international markets.
With just three working days next week before the US Treasury's October 17 deadline for raising the debt ceiling, the Senate's Republican and Democratic leaders showed an intensifying desire to end the two-week government shutdown and ease the threat of default.
Democratic Senate Majority Leader Harry Reid, Obama's top wingman in Congress, said he held "extremely cordial but very preliminary" talks with top Republican Senator Mitch McConnell.
"Nothing conclusive" emerged from the pair's first face-to-face discussion about the twin crises, Reid told reporters.
And Reid downplayed hopes of a quick fix, as the prospects of a weekend deal appeared to slip away.
McConnell suggested a bipartisan offer spearheaded by moderate Republican Senator Susan Collins as a workable template for a possible deal, but Reid rejected it.
The measure would extend borrowing authority into 2014 and fund the government for six months, but it would also repeal a medical device tax introduced under Obama's health care law, as an incentive to get conservatives on board.
Democratic leaders were most concerned, however, with the proposal to keep the existing automatic spending cuts, a move that would put agency spending at $70 billion (S$ 87 billion) below what Democrats have proposed for fiscal 2014.
The Senate will hold a rare Sunday session, but the House of Representatives is off until Monday, when markets around the world might start seriously digesting Washington's impasse.
World Bank chief Jim Yong Kim urged policymakers to avert the crisis, warning that "we are now five days away from a very dangerous moment."
"If this comes to pass, it could be a disastrous event for the developing world, and that in turn will greatly hurt the developed economies as well," Kim said at the close of the annual World Bank-International Monetary Fund meetings in Washington.
With the House negotiations in tatters, Obama called a snap meeting at the White House with the Senate's Democratic leadership to regroup.