WASHINGTON -- Senate leaders reached last-minute agreement Wednesday to avert a threatened Treasury default and reopen the government after a partial, 16-day shutdown, according to a Republican senator who also said congressional leaders would push for passage as soon as possible.
The Dow Jones industrial average soared on the news that the threat of default was easing, rising roughly 200 points by late morning.
"I understand they've come to an agreement but I'm going to let the leader announce that,'' Sen. Kelly Ayotte, R-N.H., said as she walked into a meeting of Senate Republicans called to review details of the emerging deal struck by Senate Majority Leader Harry Reid and GOP Leader Mitch McConnell.
Officials said the proposal called for the Treasury to have authority to continue borrowing through Feb. 7, and the government would reopen through Jan. 15.
There was no official comment from the White House, although congressional officials said administration aides had been kept fully informed of the negotiations.
While the emerging deal could well meet resistance from conservatives in the Republican-controlled House, the Democratic Leader, Rep. Nancy Pelosi of California, has signaled she will support the plan and her rank and file is expected to vote for it in overwhelming numbers.
That raised the possibility that more Democrats than Republicans would back it, potentially causing additional problems for House Speaker John Boehner as he struggles to manage his tea party-heavy majority.
Ayotte said she understood the legislation would first receive a vote in the House, an arrangement that would speed its way through Congress to President Barack Obama's desk.
Speaker John Boehner and the House Republican leadership met in a different part of the Capitol to plan their next move. A spokesman, Michael Steel, said afterward that no decision had been made "about how or when a potential Senate agreement could be voted on in the House.''
The developments came one day before the deadline Treasury Secretary Jack Lew had set for Congress to raise the current $16.7 trillion debt limit. Without action by lawmakers, he said, Treasury could not be certain it had the ability to pay bills as they come due.
In addition to raising the debt limit, the proposal would give lawmakers a vote to disapprove the increase. Obama would have the right to veto their opposition, ensuring he would prevail.
House and Senate negotiators would be appointed to seek a deficit-reduction deal. At the last minute, Reid and McConnell jettisoned a plan to give federal agencies increased flexibility in coping with the effects of across-the-board cuts. Officials said that would be a topic for the negotiations expected to begin shortly.
Despite initial Republican demands for the defunding of the health care law known as Obamacare, the pending agreement makes only one modest change in the program. It requires individuals and families seeking subsidies to purchase coverage to verify their incomes before qualifying.
There were some 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.