Congressional leaders late Tuesday said they were close to locking down agreements on a $1.4 trillion omnibus spending package and a coronavirus relief bill that could deliver up to $1 trillion in additional aid.
"We're just exchanging paper back and forth and hopefully we can come to a deal soon," Senate Minority Leader Charles E. Schumer said as he was leaving the Capitol around 10:30 p.m.
Senate Majority Leader Mitch McConnell, who left shortly before his Democratic counterpart, told reporters that a deal was near.
"We're making significant progress and I’m optimistic that we're gonna be able to complete an understanding sometime soon," the Kentucky Republican said. "Everybody wants to get a final agreement as soon as possible. We all believe the country needs it. And I think we're getting closer and closer."
Shortly before McConnell spoke, House Minority Leader Kevin McCarthy emerged from the Senate GOP leader's office where the two Republicans met for about 90 minutes. Earlier, they'd met with Schumer and Speaker Nancy Pelosi for about two hours.
"I think it's going really well ... I think we're close," McCarthy told reporters. "I think we've built a lot of trust. I think we're moving in the right direction. I think there's a possibility of getting it done. So we're finalizing out to see if it's possible."
McConnell and Pelosi for the past week have said lawmakers wouldn't leave town without a coronavirus relief deal in hand, as well as completed fiscal 2021 spending bills.
Before the meeting, Pelosi hadn't been sure the group would resolve everything Tuesday, but emphasized the importance of reaching agreement ahead of the Friday funding deadline.
"We hope that will happen in a way that keeps government open," the California Democrat told reporters. "I know that we will finish our work in the House."
Pelosi spoke with Treasury Secretary Steven Mnuchin earlier Tuesday for about an hour, according to Pelosi spokesman Drew Hammill. Mnuchin had been scheduled to join the congressional leaders' meeting by phone but it's unclear if he participated throughout the night.
The vast majority of disputes on the fiscal 2021 omnibus package have been resolved, according to aides involved in the talks who were not authorized to speak publicly.
But with Tuesday's “big four” discussions between the top lawmakers in both chambers pushing into the evening, it became apparent legislative text wouldn't be ready until Wednesday at the earliest.
Aides on both sides of the aisle said it was unlikely the omnibus and COVID-19 measures would be posted Tuesday night because of the drafting work needed even after a broad White House-leadership agreement. The House returns to Washington on Wednesday but is not planning to vote on the omnibus until Thursday at the earliest, according to its weekly schedule.
A bipartisan group of legislators released two bills on Monday totaling $908 billion, but there was considerable pressure to drop the two most contentious pieces: $160 billion for states and localities, and business liability protections in the event customers, employees or vendors get sick.
Later Monday evening in a phone call with Mnuchin, Pelosi made another pitch for direct state and local government aid, although earlier that day she declined to say her support for a deal would be conditioned on that.
Democrats, with the exception of West Virginia Sen. Joe Manchin III, remain opposed to how the group drafted the liability protections. And without a liability deal, Republicans won’t accept the state and local funds.
Save it for 2021?
McConnell suggested last week that Congress set aside the issues of state and local aid and liability protections until next year, allowing lawmakers to pass unemployment aid, funding to help small businesses, money for vaccine distribution and funding for other items with broad bipartisan support.
McConnell told reporters earlier Tuesday that it makes sense to put aside the disputed items given President-elect Joe Biden will take office next month, a fact the Kentucky Republican conceded earlier in the day.
"We all know the new administration is going to be asking for yet another package. It's not like we won’t have another opportunity to debate the merits of liability reform and of state and local government in the very near future," McConnell said.
Pelosi and Schumer rejected McConnell's suggestion of splitting off state and local aid last week, but several Democrats have started to say the party may have to take what it can get for now.
"I continue to believe … that we can find a compromise, but we have to move forward on this $748 billion that we all agree on," Sen. Chris Coons, D-Del., said Tuesday on CNN, referring to the bipartisan group's package minus $160 billion in state and local assistance.
Manchin and Sen. Susan Collins, R-Maine, each told reporters Tuesday that their group's $748 billion piece will be part of the eventual year-end legislation. "I think that some version of it is likely to be in the omnibus," Collins said.
Others said additional elements could be added, like direct payments to households sought by lawmakers on both sides of the aisle. Sen. Mark Warner, D-Va., told CNN on Tuesday that the tax rebates were "the outstanding issue" negotiators needed to resolve.
Sen. Bernie Sanders, I-Vt., has said he won't consent to let the Senate recess for the holidays without securing another round of cash payments, similar to those distributed as part of a $2 trillion aid package enacted in March.
While publicly still holding out hope for direct aid to states and localities, Democrats were seeking to bolster state and local resources in other ways. Schumer on Tuesday morning said any aid deal should secure additional funding for states' vaccine distribution needs.
“We need to fully fund not only production of the vaccine but its distribution as well. The states need that money,” Schumer said on the Senate floor. The New York Democrat later told reporters that $6 billion for distribution in the bipartisan group's bill isn't enough.
Paul M. Krawzak and David Lerman contributed to this report.