Urgent efforts to prevent an economically devastating national default rose and then retreated with astonishing swiftness as Republicans softened their long-standing demands and the White House appeared agreeable to a compromise, only for Senate Democrats to declare it unacceptable.
Mr Reid referred to a Republican plan to leave the 10-day partial government shutdown in place while raising the nation's 16.7 trillion dollar (£10.4 trillion) debt limit and triggering negotiations between the Republicans and Mr Obama over spending cuts and other issues.
House speaker John Boehner produced the proposal as the partial shutdown entered its 10th day. Separately and more ominously, the administration has warned that unless the federal debt ceiling is raised, the government will deplete its ability to borrow money by next Thursday, an event officials have warned could trigger an unprecedented US financial default that could wound the world economy as well as America's.
Passing temporary funding bills to keep the government running and upping its debt limit so it can pay its bills in full and on time are normally routine matters in Congress. But they have become entangled in Republican demands for cuts in government programmes, including Mr Obama's 2010 health care overhaul law, and a bigger effort to cut long-term federal deficits.
Heartened by any hint of progress, Wall Street chose to accentuate the positive. After days of decline, the Dow Jones industrial average soared 323 points on hopes that the divided government was taking steps to avoid a default. Mr Reid's dismissive comments at the White House came at the end of the trading day.
Despite his words, some Republicans said they might look to him to add a provision reopening the government to any debt-limit increase the House passed.
The up-and-down day coincided with a warning from treasury secretary Jack Lew, who said the prospect of default had already caused interest rates to rise, and that worse lay ahead.
Appearing before the Senate Finance Committee, Mr Lew said the Treasury must pay social security and veterans benefits as well as salaries to active duty military troops during the second half of this month. He said failure to raise the debt limit by October 17 "could put timely payment of all of these at risk".
Mr Boehner led a delegation of Republicans to the White House for a late-afternoon meeting with Mr Obama as the two sides groped for a way out of the latest in a string of crises.
"I would hope the president would look at this as an opportunity and a good faith effort on our part to move halfway, halfway to what he's demanded, in order to have these conversations begin," Mr Boehner said.
He spoke after informing his rank and file that he intends to bring legislation to the floor to let the Treasury borrow freely until November 22, contingent on Mr Obama's agreement to open talks on legislation to reopen the government and discuss other pressing issues.
That would leave in effect the partial government shutdown which has idled 350,000 federal workers but so far has not produced the type of widespread economic hardship that a default might mean.