"The president's 3 p.m. meeting with the bipartisan leadership has been postponed to allow leaders in the Senate time to continue making important progress towards a solution that raises the debt limit and reopens the government," a statement Monday from the White House press office said.
Politico reported Senate Majority Leader Harry Reid offered Senate Republican Leader Mitch McConnell a plan to open the U.S. government until mid-to-late December and raise the debt limit for a year, Politico reported.
The report of Reid's actions came hours before President Obama and Vice President Joe Biden were to meet with House and Senate party leaders Monday to try to reach an agreement on raising the debt ceiling as the Thursday deadline for bumping the U.S. debt ceiling loomed.
Sources familiar with the discussions between Reid and McConnell told Politico the proposal also would establish a framework for broader budget negotiations with the House over the automatic sequestration spending cuts and other major deficit issues, the sources told Politico.
After meeting twice Monday, Reid and McConnell both expressed hope a deal would be reached.
"I'm very optimistic that we will reach an agreement that's reasonable in nature this week to reopen the government, pay the nation's bills and begin long term negotiations to put our country on sound fiscal footing," Reid said on the floor.
McConnell said he was also optimistic "we're going to get a result that will be acceptable to both sides."
Also, Senate Democrats indicated they'd be open to delaying the medical device tax as outlined under the Affordable Care Act -- aka Obamacare -- and a requirement that those receiving Obamacare subsidies be subject to income verification, but they would have to get something from Republicans in return, sources said.
After meeting with Reid for about 20 minutes, Democrats expressed confidence a deal could be struck before Thursday, Politico said.
"I think the country will be up and running. I really do," Sen. Joe Manchin, D-W.Va., said.
If Reid and McConnell can strike a deal, it would pressure House Speaker John Boehner, R-Ohio, to act, even if it means allowing the House to vote on a measure not supported by a majority of House Republicans.
House Republicans were expected to meet Tuesday to discuss options. The House GOP has been adamant that there will be no vote on a so-called "clean" bill to either temporarily reopen government -- shuttered since Oct. 1 -- or raise the debt limit.
An administration official said Obama and Biden would meet with Reid,McConnell, Boehner and House Democratic Leader Nancy Pelosi.
The government began Monday with about $30 billion in the bank but by Thursday, administration officials say, it will have exhausted all borrowing authority and have only that cash on hand, The Washington Post reported.
Experts on federal finances say the cash on hand may be enough for making payments for possibly up to two weeks but no longer.
The experts told the Post Obama and his administration would have to make some tough decisions about whom to pay and when -- or if -- to cut checks because daily tax receipts will make up only about 70 cents of every dollar of necessary spending.
The Post said a key test of investor reactions would come Thursday, when the Treasury Department is to refinance more than $100 billion in debt. If investors uncertain about U.S. finances refuse to refinance the debt or demand higher interest rates, markets could go into a tailspin.
Alan Simpson and Erskine Bowles, co-founders of the Campaign to Fix the Debt, said they will launch a national ad campaign Tuesday to underscore the need for lawmakers to end partisanship they said diverts attention from passing a budget and dealing with the national debt.
"The American people are fed up with what's going on in Washington," said Simpson, a former Republican senator. "The national debt is a threat to jobs and our economic future yet we continue on our course of inaction."
"It's going to take real political courage for folks to begin working together to confront the long-term fiscal problems facing the country," former Clinton White House Chief of Staff Bowles said. "Now is the time to tell Washington it's long past time to fix the debt."