With House Republicans blaming President Barack Obama Saturday for the collapse of talks on extending US borrowing authority, the Senate scrambled to piece together a bipartisan exit strategy.
Amid bitter accusations by House members that the White House did not negotiate in good faith over a face-saving exit to the twin crises, the focus shifted abruptly to the Senate, where Republicans were claiming "significant progress" towards a possible solution that would reopen the government and ease the threat of default.
For the first time in weeks, Senate Majority Leader Harry Reid, Obama's top wingman in Congress, and top Senate Republican Mitch McConnell entered into face-to-face talks on the issues.
"The real conversation that matters now is the one that's taking place between McConnell and Reid," Senator Bob Corker told reporters.
"I think the fact that they're actually talking for the first time person to person represents some significant progress," said Senator John Cornyn, the number two Republican in the chamber.
But Reid downplayed hopes of a quick fix. Asked if an alternative plan to the House offer could be rolled out Saturday, Reid said "I doubt it."
House Republicans huddled on day 12 of a partial federal shutdown following a bitter budget dispute, and as the nation careens toward an October 17 deadline to raise the debt ceiling.
Earlier this week, House Speaker John Boehner and his leadership met with Obama and suggested a six-week extension to US borrowing authority -- without which Washington could begin to default on its obligations for the first time.
Despite previous comments that the White House would be open to such a plan, Obama said Saturday he wanted a long-term deal.
"It wouldn't be wise, as some suggest, to just kick the debt ceiling can down the road for a couple of months, and flirt with a first-ever intentional default right in the middle of the holiday shopping season," Obama said in his weekly radio and video address.
Damage "to America's sterling credit rating wouldn't just cause global markets to go haywire; it would become more expensive for everyone in America to borrow money."
The remarks prompted frustration from House Republicans.
"They felt they were duped," Congressman John Fleming said of the House leadership.
"They were led to believe that the president did want to negotiate in good faith and now they find out that that was never in the cards."
Eric Cantor, the number two Republican in the House of Representatives, looked across the Capitol for the next move: "Right now I'm hoping the Senate is standing strong, and then we as Republicans can speak with one voice."
"We're trying to see a resolution as quickly as possible," he said.
House Republicans have argued for any budget deal to include concessions on funding Obama's health care reforms, while Senate Republicans are more willing to re-open government without such conditions.
One possible compromise was being offered by Republican Senator Susan Collins.
The measure would raise borrowing authority for up to a year, fund the government and repeal a medical device tax introduced under the health care law -- as an incentive to get conservatives on board.
Collins said the parties were discussing her plan, but "I think we're a long way from the end of the negotiations."
"The House strategy hasn't worked so far," she added.
With developments on a possible breakthrough in the Senate, a bill to extend the debt ceiling by 15 months with no conditions failed to advance in the chamber.
The measure would have taken the issue off the table until after the mid-term congressional elections next year, but it was unlikely to become law in the Republican-led House.
Some lawmakers were adamant the House remains the linchpin for any agreement.
"At the end of the day, whatever they do (in the Senate) still has to come through here," House Republican Tom Cole told reporters.
Amid multiple tracks of dialogue Friday, the main principles of a compromise had seemed to emerge in public statements from both sides.
The government, shuttered since October 1, would be fully reopened, possibly on an interim basis, and there would be some kind of commitment from both sides to work towards an elusive deal to tackle the deficit, rein in spending and possibly reform social programs and some aspects of the tax code.
But, perhaps sensing that it now has the upper hand in the fight, the White House appears to be looking for an extension of borrowing authority from the current $16.7 trillion level for a longer duration.
World economies are closely monitoring the impasse, and on Friday the G20 called for Washington to quickly end the paralysis.
Finance chiefs of the globe's most powerful economies said in a statement that "the US needs to take urgent action to address short-term fiscal uncertainties."