Obama hopeful as fiscal meeting nears with top lawmakers

WASHINGTON - President Barack Obama said lawmakers appear to have made progress on a deal to reopen the government and avert a looming default on Monday as he prepared to meet congressional leaders with a Thursday deadline drawing near.

US President Barack Obama speaks to reporters during a visit to Martha's Table, a kitchen which provides meals for the needy, in Washington October 14, 2013.[Photo/Agencies]

Obama and Vice-President Joe Biden were due to meet at 3 pm with Senate Majority Leader Harry Reid, Senate Republican Leader Mitch McConnell, House of Representatives Speaker John Boehner, and House Democratic Leader Nancy Pelosi, the White House said.

"My hope is that a spirit of cooperation will move us forward in the next few hours," Obama said after visiting a charity organization for low-income families where some furloughed government workers have been volunteering.

Talks have been largely fruitless since what appeared to be a breakthrough on Thursday, but senators and aides from both parties said they still thought they could reach agreement in the coming hours.

With the most unrealistic demands taken away, the two sides were trying to craft a temporary measure that would allow Washington to step back from the ledge.

"I'm hopeful we can have something meaningful by the end of the day," Republican Senator Roger Wicker of Mississippi said on MSNBC.

The Treasury Department says it cannot guarantee that the US government will be able to pay its bills past October 17 if Congress does not raise the $16.7 trillion debt ceiling by then.

It is unclear whether Congress can meet that deadline. Even if Republicans and Democrats in the Senate reach agreement on Monday, hard-liners such as Texas Republican Senator Ted Cruz might be able to delay a vote for several days.

The House also would need to sign off on the plan. Republican leaders there face strong pressure from a vocal conservative flank that is deeply reluctant to make concessions to Obama and his Democrats.

Many say they will refuse to back any deal that fails to undercut Obama's 2010 healthcare reform law, the Affordable Care Act - a non-starter for Democrats.

"We've got to draw some lines in the sand now. This, to me, is an epic battle over Washington versus America, and I hope America wins," Republican Representative Matt Salmon of Arizona said on CNN.

Analysts expect that any deal is likely to come down to the wire.

Though Treasury likely will have enough cash on hand to meet its obligations for a week or so, it might be forced to pay a higher interest rate on debt it is due to issue on Thursday.

Banks and money market funds are already shunning some government securities that are normally used for short-term loans. In China, the largest foreign holder of US debt, the state news agency Xinhua said it was time for a "de-Americanized world."

US stocks fell at the open on Monday but by early afternoon major indexes were mixed. The S&P 500 Index was down 0.1 percent while the Nasdaq Composite Index was up 0.2 percent.