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U.S. Senate leaders are rushing to lock down an agreement to end the fiscal impasse, stepping in after House Republicans’ last-minute plan to avert a U.S. government default collapsed.

The emerging Senate accord may be announced as early as this morning, though passage in the Republican-led House is far from assured and one ratings company yesterday placed the U.S.’s AAA credit rating on a negative watch.

The framework being negotiated by Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell presents the clearest path to ending the 16-day-old government shutdown and extending U.S. borrowing authority, which lapses tomorrow. It would fund the government through Jan. 15, 2014, and suspend the debt limit until Feb. 7.

“Senator Reid and Senator McConnell have re-engaged in negotiations and are optimistic that an agreement is within reach,” Adam Jentleson, Reid’s spokesman, said in a statement last night.

Whether the U.S. misses promised payments, including benefits, salaries or interest, may depend on two Republican lawmakers.

In the Senate, Texas Republican Ted Cruz, who has led a campaign against President Barack Obama’s signature health law, has left open the possibility of delaying the debt-ceiling measure. If any of the 100 senators chose to delay it, a vote could be pushed to as late as next week.

In the House, Representative John Boehner of Ohio will face one of the most important decisions of his tenure as speaker: whether to allow a Senate agreement to come to the House floor unimpeded, or try to amend it. Democrats say they could pass a Senate deal in the House, with a handful of Republicans, if Boehner would allow a vote.

A Senate accord on government funding and the debt ceiling will probably be presented for a House vote by Boehner and likely win passage with a majority of Democrats and minority of Republicans, Representative Charles Dent, a Pennsylvania Republican, said last night in an interview on CNN.

Reid, a Nevada Democrat, and McConnell, a Kentucky Republican, temporarily suspended talks yesterday while Boehner tried and failed to marshal House Republicans behind a plan that was significantly scaled-down from demands for health-law changes that led to the U.S. government shutdown last month.

The partial shutdown has closed national parks, slowed clinical drug trials and led to the furloughs of thousands of federal workers.

Fitch Ratings yesterday put the U.S. AAA credit grade on ratings watch negative, citing the government’s inability to raise the debt ceiling in a timely manner, according to a statement after markets in New York closed.

U.S. stocks dropped yesterday after Senate leaders suspended their talks. The Standard & Poor’s 500 Index fell 0.7 percent to 1,698.06 and the Dow Jones Industrial Average declined 0.9 percent to 15,168.01 in New York. Futures for the S&P 500 climbed 0.5 percent today at 1:13 p.m. in Tokyo after Reid and McConnell said that negotiations were resuming.

Benchmark Treasury 10-year yields rose four basis points, or 0.04 percentage point, to 2.73 percent yesterday in New York, according to Bloomberg Bond Trader prices. The rate touched 2.74 percent, the highest since Sept. 23. Rates on Oct. 24 Treasury bills rose five basis points to 0.52 percent, the highest level since they were sold in April.

Under the Senate agreement, House Republicans would get almost none of their priorities. They tried to defund or delay the health-care law, settling last month on trying to delay the requirement that individuals purchase health insurance.

Obama has described those requests as unacceptable ransom demands and insisted that Republicans relent.

Republicans persisted after the partial government shutdown started Oct. 1 and saw their approval ratings drop in polls. Hardliners resisted plans that didn’t make major changes to the Patient Protection and Affordable Care Act. Others, such as Representative Peter King of New York, stuck with Boehner while complaining about the strategy.

“And the long teachable moment ends: stove is hot,” Representative Tim Griffin, an Arkansas Republican, said on Twitter last night after Boehner scrapped the latest plan.

The emerging Senate agreement trades the pressing and already-missed deadlines for new ones over the next four months The Treasury Department would be allowed to use so-called extraordinary measures to delay default for about another month beyond Feb. 7, said a Senate Democratic aide who spoke on condition of anonymity to discuss the plan.

The Senate agreement may include a Republican-backed provision to tighten income verification requirements for people receiving health-insurance subsidies. That provision is linked to a proposal backed by Democrats and labor unions that would delay a reinsurance fee on group health plans.

Both of those health-care provisions will either be in the agreement or out of the agreement.

Senate passage of a bill could be delayed into late next week if a single senator objects, the aide said. Then that bill would have to go to the House. Procedurally, the Senate would have been able to act by Oct. 18 if the House had passed a bill last night.

Cruz, who led a Republican bid to defund Obamacare, spoke for more than 21 hours in a budget debate last month. On Oct. 14, he wouldn’t rule out stalling maneuvers, saying he wants to see the plan’s details. He made no public comments yesterday.

Unless Congress acts, the U.S. will be operating only on approximately $30 billion of cash reserves and incoming revenue starting tomorrow. It will begin missing promised payments between Oct. 22 and Oct. 31, according to the Congressional Budget Office.

Boehner has tried several times over the past month to construct a debt-limit bill that House Republicans could support, and he hasn’t brought any proposals to a vote. Republicans didn’t have enough votes for the measure yesterday, said a leadership aide who spoke on condition of anonymity to discuss vote counting.

“We’re going to be prepared tomorrow to make some decisions,” Representative Pete Sessions, a Texas Republican, told reporters in the Capitol last night.

Unlike previous stopgap spending measures, the House bill wouldn’t have made big changes to the 2010 health-care law, and it contains no cuts to entitlement programs that Republicans sought to add to a debt-limit increase or spending bill.

House Republicans have a 232-200 majority and would have needed all but 15 members to support a plan. Democratic Leader Nancy Pelosi of California said the proposal is a path to default and urged Boehner to support a bipartisan agreement emerging in the Senate.

“We’re at the 11th hour here,” said Senator Charles Schumer, a New York Democrat. “The train to avoid default was smoothly heading down the tracks and picking up speed, and all of a sudden at the last minute, Speaker Boehner decides to throw a log on those tracks. Enough already.”

The House plan would have kept the government open through Dec. 15 and suspended the debt limit until Feb. 7, 2014. It would have prevented the government from making any contribution toward the health insurance of members of Congress and their staff, the president, the vice president and high-ranking administration officials.

Senator Lindsey Graham, a South Carolina Republican who’s close to Boehner and spoke to him earlier yesterday, said he’s concerned that the speaker could become a “victim” of a failed Republican strategy to use a government shutdown as leverage to try to force changes to the health-care law.

Graham also said he’s “getting to the point of disgust” with Democrats including Reid for refusing to help Republicans extricate themselves from an impossible negotiating position.

“Instead of trying to help us find a way out of a bad spot -- we won’t be the last political party to overplay our hand, it may happen one day on the Democratic watch,” he said. “And if it did, would Republicans, for the good of the country, kind of give a little?” Graham said, adding that Republicans went “too far” and “screwed up.”