By Vivienne Russell | 15 October 2013

Senators are reported to be close to an agreement that would both end the partial shutdown and forestall the deadline that could see the US start defaulting on its debt in two days time.

On Thursday, the US Treasury will exhaust its borrowing capacity unless Congress extends the $16.7 trillion debt ceiling.

The Senate last night began debating the Default Prevention Act, which would lift the debt cap until the end of 2014.

However, according to US reports, the deal under discussion would fund the government until mid-January while raising the debt ceiling until early to mid February.

Any package agreed in the Democratic-controlled Senate would also have to be approved by the House of Representatives, which has a Republican majority.

However, comments made by both the Senate’s Democrat and Republican leaders struck an upbeat note.

Speaking on the Senate floor yesterday, Republican leader Mitch McConnell said: ‘We have had an opportunity over the last couple of days to have some very constructive exchanges of views about how to move forward. Those discussions continue, and I share [the] optimism that we’re going to get a result that will be acceptable to both sides.’

His Democrat counterpart Harry Reid echoed this view, saying he was ‘very optimistic’ that a reasonable agreement would be reached this week.

‘We've made tremendous progress,’ said Reid.

‘We hope with good fortune... perhaps [Tuesday] will be a bright day. We’re not there yet.’

The shutdown began two weeks ago after Congress failed to agree a federal Budget bill. Hundreds of thousands of US federal government employees have been put on unpaid leave and a range of offices and attractions are closed.