Washington – Bipartisan negotiators, racing against the clock to finalize a possible compromise package on the debt ceiling, said Sunday they were getting close to a deal as they tried to allay fears that the country could face its first-ever default in a matter of days.
Talks intensified ahead of a test vote in the Senate on the Democrats' debt-ceiling plan. That vote is expected to fail, putting the onus on negotiators to come up with yet another alternative.
After disagreeing about the status of negotiations the day before, Senate leaders indicated Sunday morning that they were making good progress on the new proposal.
Sens. Dick Durbin, D-Ill., and Jon Kyl, R-Ariz., the No. 2 senators in their respective parties, both said on "Fox News Sunday" that they were feeling better about the discussions.
"I have a much more positive feeling than I did 24 hours ago," Durbin said.
Senate Republican Leader Mitch McConnell said negotiators are "very close" to an agreement that he could recommend to fellow Republicans. Speaking on CBS' "Face the Nation," McConnell said the agreement is "within our reach."
Though White House senior adviser David Plouffe cautioned there's no deal yet, Senate leaders are in dire need of a compromise.
Senate Democratic Leader Harry Reid has postponed a vote on his deficit-reduction package until 1 p.m. ET. That vote is still scheduled to take place, but 43 Senate Republicans have already vowed to oppose it, putting more pressure on negotiators to come up with an alternative.
Lawmakers have until Aug. 2 to raise the $14.3 trillion debt ceiling or risk the possibility of default. The Obama administration says that after Tuesday, the Treasury can no longer pay all of America's bills.
"There's no question we're approaching the final hour," Gene Sperling, director of the National Economic Council, told "Fox News Sunday."
Sources said the tentative arrangement between the White House and Republicans closely resembles the plan first proffered by House Speaker John Boehner before he modified it to appease Tea Party conservatives.
Sources said the debt ceiling would be raised by as much as $2.4 trillion, with a roughly equal amount of deficit-reduction. Though sources said the debt-ceiling increase would be split into two parts, Congress would have to meet a very high threshold to stop it -- likely assuring President Obama an increase that lasts until early 2013, as he requested.
The plan would immediately cut spending by about $900 billion over the next decade, and then task a commission to recommend another set of cuts that would, taken together, add up to the size of the debt-ceiling increase.
Importantly, a "trigger" in the proposal would automatically enact across-the-board cuts to Medicare, defense and other areas if the committee's recommendations are not approved by the end of the year.
One source familiar with the talks noted that while the Medicare cuts would be capped, defense cuts would not and would make up roughly half of the total cuts. This mechanism could help compel Republicans avoid the "trigger" entirely by working through the commission to achieve deficit reduction.
But the framework of the deal floated perilously between the alternatives pushed by House conservatives and Senate Democrats.
The tentative plan would have Congress vote on a balanced-budget amendment -- a key demand of Tea Party-aligned Republicans -- but would not require Congress to approve it in order for the debt ceiling to be raised.
Top aides to House GOP lawmakers told Fox News they were concerned about the emerging deal. One source said it could be difficult to bring House conservatives back on board with such a plan.
At the same time, the tentative arrangement is closer to Boehner's original bill than Reid's. Reid, while giving GOP lawmakers more time to negotiate, initially indicated Saturday evening he was not satisfied with the progress so far. After Republican leaders claimed they were close to a deal, Reid shot that claim down.
When he emerged on the floor late at night to announce the new vote schedule, he sounded a bit more upbeat. Reid said he hopes the new round of talks "bears fruit."
The partisan makeup of Congress makes the task of striking a deal that much more complicated.
Neither party controls a supermajority in the Senate, making it necessary to attract bipartisan support in order to pass a bill.
Republicans hold a broad majority in the House, but conservatives may be skeptical of any deal that has too many Democratic fingerprints on it from the Senate side.
House Republican Whip Kevin McCarthy, R-Calif., told "Fox News Sunday," that the talks were moving in the "right direction" but that House Republicans would "have to look at the details."
One source suggested that Boehner could change course and corral a coalition of Republicans along with a larger batch of Democrats -- though that would put the speaker in a difficult position within his own caucus.