Senate Leaders Strike Deal to End U.S. Debt Impasse

Republican and Democratic leaders in the U.S. Senate struck an agreement Wednesday to end a fiscal impasse, hours before Washington hits its debt limit, a senator said.

"I understand that they've come to an agreement," said Senator Kelly Ayotte, a Republican from New Hampshire.

Senate Majority Leader Harry Reid and Mitch McConnell, the top Republican in the senate, led the negotiations to avert a potentially devastating debt default after an earlier bid collapsed in a bitterly divided House of Representatives.

"I hope that we're nearing the end of this ordeal, this impasse which never should have happened in the first place," said Senator Susan Collins, a moderate Republican who has led efforts to broker a compromise.

Details of the latest agreement were not known, as lawmakers went in to conference to learn what the leaders had agreed to.

Senate approval of the deal still would have to be ratified by the Republican-controlled House, where a core Tea Party faction has until now vehemently resisted compromise.

The move comes with a midnight deadline. On Thursday the United States is expected to hit the limit of its $16.7 trillion borrowing authority, raising the threat of a default with potentially catastrophic effects on the world economy.

Meanwhile, President Barack Obama urged Congress later on Wednesday to move swiftly to approve the deal to reopen the U.S. government and remove the threat of a potentially devastating default.

White House spokesman Jay Carney said Obama was grateful to the leaders of the Senate for working together and wanted lawmakers now to ensure "the government reopens and the threat of default is removed."

"We obviously hope that each house will be able to act swiftly because we're already on Day 16, I think ... of a wholly unnecessary shutdown of government with real consequences for real people," Carney added.

"And we are obviously very close to the point beyond which the United States Treasury no longer has the authority to borrow new money to meet our obligations."