Reid took a page from House Budget Committee Chairman Paul Ryan, R-Wis., saying Congress should "use the overseas contingency fund to delay the implementation of sequestration. We could do it for five months. During this five- month period we could come up with something that was longer term."
Reid said the account contains $750 billion and told reporters some action would be taken Tuesday afternoon.
Reid also said action needs to be taken on the deficit overall but Republicans are blocking any movement.
Reid said Republicans are refusing to participate in discussions due to fears about what the Tea Party will do.
"So the last three years we've lurched from crisis to crisis because the Tea Party-driven Republicans, they said it's time to return to regular order until they say it's time not to return to regular order," Reid said.