Senate leaders upbeat about possible deal to raise budget caps

Senate Majority Leader Mitch McConnell and Senate Minority Leader Chuck Schumer huddled in the Kentucky Republican's office to hash out remaining differences over the caps, which are the result of the unpopular budget sequestration of 2013, which significantly curbed spending growth on defense and domestic programs.

Schumer emerged from the meeting and repeatedly told reporters they had "good meeting" but declined to provide further details.

Democrats and Republicans rail against the spending restraints but have struggled to reach an agreement to remove them largely because Republicans want to increase Pentagon funding more than domestic funding, something Democrats refuse to do.

"We're one day closer to closer to Thursday's government funding deadline," McConnell said on the floor before the meeting. "I'm pleased to report that our bipartisan talks are continuing to progress toward an agreement on spending caps and important priorities all of us are eager to address."

Schumer was equally hopeful a deal was near.

"Even though a deal has eluded us for months, negotiators are now making significant progress," Schumer said on the floor before his meeting with McConnell. "The Republican leader and I have been working together quite productively. Of course, there are still some outstanding issues to be resolved, but we are closer to an agreement than we have ever been."

An agreement on the caps would make it much easier for appropriators to reach a funding agreement that will last until a new fiscal year begins October 1. Congress has passed a series of continuing resolutions, or CRs, to keep the government open, except for one brief closure when Democrats resisted approving a stopgap bill to press for unrelated immigration reforms. Overall, those resolutions are considered by both parties to be a clumsy and inefficient way to fund the government because it just continues spending levels from the previous year and makes no needed fine print adjustments for evolving needs at the federal agencies.

An agreement could also make it easier to pass other key measures, including overdue disaster relief and a hike in the debt ceiling.

"I know there continues to be discussions on the spending caps and I'm hoping that dam will break and we can get a lot of this overdue business taken care of," Sen. John Cornyn of Texas, the second-ranking Senate Republican.

Cornyn said he didn't know how long it would take to process a deal on the caps but indicated at least one more short term CR would need to pass for it to happen. The House is voting Tuesday on a six-week CR that includes a full year of funding for the military.

Senate Democrat are expected to block that bill, meaning Senate leaders will likely have to strip out the extra defense funds and likely send it back to the House before Thursday's deadline.