Democratic Senate Majority Leader Harry Reid has reported progress towards a deal to avoid a threatened default and end a two-week partial US government shutdown, as President Barack Obama called congressional leaders to the White House to press for an end to the impasse.
While Mr Reid said there was not yet an accord, he said he hoped to have a proposal to outline when the two men and House of Representatives leaders meet with Mr Obama later today. No details were available on the terms under discussion.
Speaking to reporters at a Washington charity, Mr Obama said: "My hope is that a spirit of co-operation will move us forward over the next few hours."
Otherwise, he warned that the threat of default was legitimate.
"If we don't start making some real progress both in the House and the Senate, and if Republicans aren't willing to set aside some of their partisan concerns in order to do what's right for the country, we stand a good chance of defaulting," he said.
At issue are two normally routine pieces of legislation that have become entangled in disputes over Mr Obama's healthcare overhaul and overall government spending.
Congress' failure to pass a Bill temporarily funding the government led to the partial shutdown on October 1, the first in 17 years. And if Congress does not approve a separate measure increasing the debt ceiling - the amount of money the government is allowed to borrow - the Obama administration says it will not be able to pay its bills, risking default.
The two Senate leaders, Mr Reid and Mr McConnell, had spoken by phone yesterday but failed to agree on a deal to raise the nation's borrowing authority above the 16.7 trillion US dollars (£10.5 trillion) debt limit or reopen the government.
Congress is racing against the clock, with Treasury Secretary Jack Lew warning that the US will quickly exhaust its ability to pay the bills on Thursday.
Mr Reid and Mr McConnell - veteran senators hardened by several budget disputes and years of negotiations - are at an impasse over yet another source of fiscal fighting: the automatic, across-the-board spending cuts known as sequestration and whether to undo or change them as part of a budget deal.
Democrats are pressing for a higher amount of spending, while Republicans want to keep the spending at the deficit-cutting level of the 2011 law, the result of that year's high-stakes budget battle.