Mitch McConnell, the Republican Senate minority leader, has said that he is "very close" to recommending to his party members that they sign a debt deal with President Barack Obama and the Democratic Party.
According to reports from Capitol Hill, US Democrats and Republicans have nearly reached a tentative deal on how to raise the debt ceiling that would avert an unprecedented default on the country's debt, ending one of the largest partisan fights in recent memory.
Al Jazeera's Rob Reynolds, reporting from Capitol Hill, said that the agreement would raise the debt ceiling until after 2012 elections, cut $1 trillion in the next ten years, set up a bipartisan Congressional committee and cut defence spending.
"A framework plan for reducing the deficit, and raising the debt ceiling is very close to becoming an agreement, a deal as it were, but it is not there yet, the cake is not yet baked," Reynolds said.
David Plouffe, a White House adviser, described the deal as a two-stage process, with a first set of spending cuts of about $1 trillion.
A special congressional panel would be established to recommend further deficit reductions.
The tentative deal will not be voted on Sunday. Meanwhile, the US Senate failed to break the 60-vote threshhold by 10 votes to end the debate on a bill proposed Harry Reid, the Senate Democratic majority leader.
However, Reid said that "we are cautiously optimistic," before the closure of the vote in the Senate.
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"We're hopeful and confident it can be done."
Reid told politicians not to wander too far from the Capitol in case he calls another vote.
"I would not suggest a ballgame," he said.
The vote paves the way for a cross-party bill which will probably feature elements of Reid's plan.
US congressional leaders have made strides toward reaching a compromise during talks on breaking a debt limit deadlock and averting a potentially catastrophic government default, officials familiar with the talks said.
The signs of apparent progress followed talks between top congressional Republicans and Obama at the White House.
McConnell said he had spoken with Obama and Vice-President Joe Biden and declared himself "confident and optimistic that we're going to get an agreement in the very near future".
"Senator McConnell and I are both confident that we're going to be able to come to some agreement with the White House and end this impasse," Republican House Speaker John Boehner said as they held a joint press conference.
"This [negotiation] is all taking place pretty much behind closed door in meetings principally between the Republican leader of the Senate, Mitch McConnell, and other Senate and House leaders and the White House directly," Reynolds said
If Congress fails to raise the debt ceiling by August 2, the US could be in danger of losing its AAA credit rating, leading to tax rises in the form of higher interest rates on mortgages and credit cards.
Al Jazeera's Anand Naidoo, also reporting from Capitol Hill, said the Democrats have relentlessly opposed the Republicans' call to increase the debt for six months and have another vote later this year.
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"President Obama himself has made it very clear that he does not want a short term solution on this. He wants to see the debt ceiling lifted all the way to 2013," he said.
"The Republicans, for their part, are saying this is a political move. The president wants it this way so he can campaign on this when he comes up for re-election in 2012."
The upbeat words on Saturday came after the Republican-led House of Representatives voted to kill Reid's proposal for raising the $14.3 trillion US debt limit, a day after the Democratic-held Senate did the same to Boehner's plan.
The House move, which amounted to a pre-emptive strike on a bill that had yet to get a Senate vote, came after an often angry and partisan debate marked by boos, cheers, and unusually personal broadsides.
When Republican Representative David Dreier said defeating the measure would help leaders of both parties negotiate a path forward, Democratic Representative Sandy Levin denounced the claim as "pernicious nonsense."
Source: Al Jazeera and agencies