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Time is running out

Published 11:12am Wednesday, October 16, 2013

WASHINGTON — Senate leaders are optimistic about forging an eleventh-hour bipartisan deal preventing a possible federal default and ending the partial government shutdown after Republican divisions forced GOP leaders to drop efforts to ram their own version through the House.

Pressured by the calendar, financial markets and public opinion polls, Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., were hoping to shake hands on an agreement Wednesday and, if possible, hold votes later in the day.

Driving their urgency were oft-repeated Obama administration warnings that the government would exhaust its borrowing authority Thursday and risk a federal default that could unhinge the world economy. Lawmakers feared that spooked financial markets would plunge unless a deal was at hand and that voters would take it out on incumbents in next year’s congressional elections.

“People are so tired of this,” President Barack Obama said Tuesday in an interview with Los Angeles TV station KMEX.

U.S. stock futures were rising early Wednesday amid strong corporate earnings and lingering hope for a deal to head off a government default. But there were also dire warnings from the financial world a day after the Fitch credit rating agency said it was reviewing its AAA rating on U.S. government debt for possible downgrade.

John Chambers, chairman of Standard & Poor’s Sovereign Debt Committee, told “CBS This Morning” on Wednesday that a U.S. government default on its debts would be “much worse than Lehman Brothers,” the investment firm whose 2008 collapse led to the global financial crisis.

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