By Richard Cowan and Thomas Ferraro
WASHINGTON (Reuters) - A month of combat in the U.S. Congress over government spending showed signs on Monday of giving way to a Senate deal to reopen shuttered federal agencies and prevent an economically damaging default on federal debt.
Senate Majority Leader Harry Reid, a Democrat, and his Republican counterpart, Mitch McConnell, ended a day of constant talks with optimistic proclamations, as details leaked out of the pact they were negotiating.
"We've made tremendous progress," Reid said at the end of a Senate session during a federal holiday, underscoring the urgency of settling a fiscal crisis that was nearing a Thursday deadline. The U.S. Treasury Department estimates it will reach a $16.7 trillion borrowing limit on October 17.
"We hope that with good fortune ... that perhaps tomorrow will be a bright day," Reid said, hinting at the possible Tuesday announcement of a bipartisan Senate deal.
McConnell, who has been a fierce critic of Reid all year instead had a smile on his face and upbeat words. "We've had a good day; had a good day yesterday," he said of his work with Reid.
The plan under discussion would promptly end a partial government shutdown about to enter its third week. It also would raise the debt ceiling by enough to cover the nation's borrowing needs at least through mid-February 2014, according to a source familiar with the negotiations.
