Kevin Hassett debt ceiling
Kevin Hassett: US debt is about the safest asset on earth
01:31 - Source: CNN Business
Washington CNN  — 

Bipartisan Senate leaders are expressing optimism over budget talks, but a meeting between top lawmakers and administration officials concluded on Tuesday without a deal, despite Senate Majority Leader Mitch McConnell saying earlier that he hoped an agreement could be reached before the end of the day.

As he left the meeting, Senate Democratic Leader Chuck Schumer told reporters talks had not resolved spending levels or domestic programs.

“We are trying to come up with an agreement, and one of the biggest questions is how to fund all the needs of the middle class on the domestic side,” Schumer said.

Earlier in the day, McConnell called the meeting with the top four congressional leaders from both parties and several top administration officials “very encouraging” and said, “Our hope is to make a deal before the day is over.”

“I don’t want to be too forward leaning in predicting an agreement, but it seems to me without exception everyone would like to,” McConnell told reporters, saying that “the agreement would be a two-year caps deal” and that “it would also in all likelihood include the debt ceiling.”

If such a deal is reached by congressional leaders and the White House it would represent a significant and rare instance of bipartisan cooperation at a time when hostility between congressional Democrats and the administration continues to escalate amid the administration’s resistance in the face of congressional investigation. The expectation is that any deal would raise spending caps and stave off $120 billion in automatic spending cuts to domestic and military programs required by sequestration. A two-year deal could also take a potentially contentious fiscal fight off the table in the run up to the 2020 presidential election.

Schumer said earlier on Tuesday that the meeting was “productive,” though he also pointed to potential roadblocks ahead.

“There are still some significant issues outstanding, particularly the domestic side spending issues, things like health care and infrastructure and things that average middle-class folks need,” he said. “But we’re having good discussions.”

The spending and debt ceiling negotiations come with a hard deadline – and hard consequences for failing to meet it. For Republicans, it would mean dramatic cuts to defense programs, a central GOP priority. Democrats would have to accept equally painful cuts to domestic programs, which have long been their top priority in talks.

News of progress on a long-sought deal came after a meeting that also included House Speaker Nancy Pelosi, House Minority Leader Kevin McCarthy, Treasury Secretary Steven Mnuchin, acting White House chief of staff Mick Mulvaney and acting Office of Management and Budget Director Russell Vought.

Both Schumer and McConnell were asked if they were confident that the White House officials they were negotiating with could speak for the President, who has turned his back on previous agreements.

“I had a really good session with the President just the two of us about a week ago about the options available to us when it comes to government spending over the next two years. A negotiated agreement with the House Democrats is the best of three alternatives,” McConnell said, speaking of the reality of divided government and the need of the two parties to talk negotiate solutions.

“Trust but verify,” Schumer said. “Obviously, we need the President to publicly sign off on whatever we agree to.”

CNN’s Haley Byrd and Phil Mattingly contributed to this report.