Business and Finance

A judge on Monday used unusually harsh language to strike down a $285 million settlement between Citigroup and the Securities and Exchange Commission over toxic mortgage securities, saying he couldn’t tell whether the deal was fair and criticizing regulators for hiding the details of the firm’s wrongdoing from the public.

U.S. District Judge Jed Rakoff said the public has a right to know what happens in cases that touch on “the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives.” In such cases, the SEC has a responsibility to ensure that the truth emerges, he wrote.

Rakoff said he had spent hours trying to assess the settlement but concluded that he had not been given “any proven or admitted facts upon which to exercise even a modest degree of independent judgment.”

The SEC replied in a statement issued by enforcement director Robert Khuzami, saying the deal “reasonably reflects the scope of relief that would be obtained after a successful trial.”

The SEC had accused the bank of betting against a complex mortgage investment in 2007

Spain’s next prime minister is a lusterless career politician who thrives on ambiguity _ rarely revealing what he thinks.

With results Sunday night showing that his conservative Popular Party crushed the ruling Socialist party and won a big parliamentary majority, Mariano Rajoy may finally be forced to show his hand.

Rajoy inherits a devastating economic downturn that has caused unemployment to swell to more than 21 percent, and comes as similar financial crises in fellow EU nations like Greece and Italy threaten to combine with Spain’s woes and drag down the global economy.

As Rajoy, 56, begins forming the next government Monday, all eyes will be on whether the gray-bearded, bespectacled leader will finally unveil a clear political vision or continue to dodge efforts to pin him down.

Many see him as a the perfect caricature of his native region _ Galicia. The people of the misty and rainy northwestern region are legendary for pokerfaced obscurity. According to a Spanish saying, when you meet a Galician on the stairs you can never tell if he’s going up or down.

“He is a Galician. They say things but you have to read between the lines,” said Rodrigo Herrero, 48, a villa caretaker.

“He’s not spontaneous or extroverted like other politicians,” added Herrero. “He lacks that friendliness and touch of charm.”

Others says there is a hidden side.

“He’s a master because he achieves his aims without apparently doing anything,” Xavier Pomes, a Catalan politician and friend of Rajoy, told El Pais, Spain’s leading newspaper.

“He’s sensible, frank. Some see him as indolent and indecisive but in reality he’s reflexive,” said Pomes.

But true to his cagey character, Rajoy has so far made little known of his plans. And with bond interest rates soaring and stock markets jittery, he is not likely to have any more time to dawdle or fudge.

In a lengthy interview in El Pais on Thursday, Rajoy said that barring pensions, “cuts will have to be made wherever they can.” But the paper pointed out that he “maintained his ambiguity on what sacrifices Spaniards will face.”

Eurasia Group analyst Antonio Barroso expects Rajoy to initially go for a “shock and awe strategy” with “quick policy changes in an effort to impress markets and his European partners, and boost Spanish credibility.”

That would also dispel questions about his own credibility.

Rajoy, a property registrar by training, held four ministerial portfolios _ among them education and interior _ in the governments of Jose Maria Aznar between 1996 and 2004. But being hand-picked as party leader in 2003 by Aznar set Rajoy up for years to accusations that he was never actually elected by those in his party, a smear that weakened his attempts to shake himself free of Aznar’s shadow.

Sunday’s ballot was third-time lucky for Rajoy. He lost general elections in 2004 and 2008 against Jose Luis Rodriguez Zapatero, who is now deeply unpopular and did not seek re-election this time. In many ways, it’s a tribute to his dogged determination to survive.

In 2004, Rajoy was also strongly tipped to win. But he lost amid voter outrage over the Madrid terror bombings by Islamic militants three days before the election. The massacre killed 191 people direct payday lenders. Rajoy and his party had initially blamed Basque separatists and continued to do so even as evidence of Islamic involvement emerged.

The party was devastated by the defeat and Rajoy had to battle to keep it unified amid divisions between moderate and more conservative factions. The 2008 loss, although not as severe, exacerbated his tenuous position, thrusting even normally friendly rightist media against him.

But Rajoy fought on, skillfully remaining silent while his party and the media were ablaze with the succession debate. His efforts bore fruit at a party congress in June when his candidacy as leader _ albeit the only one presented _ was backed by 84 percent of delegates.

A cycling and sports enthusiast, Rajoy has freely acknowledged he reads little and prefers light sports dailies to mainstream newspapers or literature. However, sensing he may soon be representing Spain on the international stage, he is now studying English, a language none of his predecessors has ever managed to command.

At 24, he suffered a serious car accident that left his face badly scarred, reportedly the reason he grew the beard.

Stiff in manner, Rajoy has never topped popularity polls and is not known for imagination or charm. In a recent TV debate with his Socialist opponent Alfredo Perez Rubalcaba, Rajoy almost never took his eyes off prepared notes. Nevertheless he scraped through the near two-hour clash, skirting questions and shedding no light on his program.

No one can deny Sunday’s victory came easy, with his opponents in the governing Socialist party crippled by their inability to cope with the economic crisis.

Over the past two years, Rajoy used the crisis to perfection in weekly parliamentary debates, hammering away relentlessly at the Zapatero government’s perceived incompetence.

But careful not to scare potential voters, Rajoy remained virtually mute on what he would do differently besides pledging to make things easier for small and medium-sized businesses _ which provide 80 percent of employment in Spain _ and indicating he will carry out the labor market and social welfare system reforms he deems necessary.

Outside the economy, he has traditionally been a close ally of the Catholic Church on moral and social issues and has repeatedly said he will revise Spain’s abortion law. His party has also appealed the country’s gay marriage law before the Constitutional Court. Both bills were considered key achievements of the Zapatero governments.

In the past, he has demanded strict law-and-order measures to control immigration and education reforms to improve one of Europe’s worst dropout rates.

A lover of Cuban cigars, Rajoy has also suggested he may ease Spain’s anti-smoking ban in the workplace.

On foreign policy, he is likely to try to win back the special friend status Aznar held with U.S. while taking a less open approach than Zapatero to some of the more radically left-leaning governments of Latin America such as Cuba and Venezuela.

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Jorge Sainz contributed to this report.

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The complex network of flood defenses erected to shield Thailand’s capital from the country’s worst floods in nearly 60 years was put to the test early Saturday as coastal high tides hit their peak. No major breaches were immediately reported.

Fear gripped Bangkok early in the day as tides along the Gulf of Thailand crested at about 9 a.m. and pushed the city’s main waterway, the Chao Phraya river, to its brink. Overflows so far have lightly inundated riverside streets from Chinatown to the famed Temple of the Emerald Buddha.

But the white-walled royal Grand Palace was dry, less than 24 hours after being ringed by ankle-deep water, and the landmark remained open to tourists. Many visitors carried parasols to protect themselves from the blistering sunshine.

Prime Minister Yingluck Shinawatra said in her weekly radio address that floodwaters that had wreaked havoc to provinces north of Bangkok in the last several weeks had started to recede, and she urged citizens to let the crisis take its course.

“We have the good news that the situation in the central region has improved as runoff water gradually decreased,” she said. “I thank people and urge them to be more patient in case this weekend is significant because of the high tide.”

She also said that the government had implemented a plan to accelerate the drainage rate and that water in the greater Bangkok area should recede by the first week of November.

Meanwhile, the streets of downtown Bangkok _ the country’s financial heart _ were bone-dry and bustling with taxis, restaurant-goers and tourists snapping pictures. But the city remained in peril, as high tides along the gulf were expected to crest again late in the day, threatening to obstruct the flood runoff from the north. The government also is worried major barriers and dikes could break.

Also on Saturday, the government’s Flood Relief Operations Center was forced to move its headquarters from its base at Don Muang airport, which is used mostly for domestic flights, to a government building nearby after a power transformer malfunctioned. Authorities were forced to shut down the airport this week after floodwaters rushed in.

On Friday, saffron-robed monks and soldiers piled sandbags outside the capital’s most treasured temples and palaces as the Chao Phraya swelled precariously beyond its banks. Most of the water receded at low tide, but worried Bangkokians were buying up bright orange lifejackets and inflatable boats, fearing the worst is yet to come.

“You have to prepare,” said Fon Kanokporn, a banker who bought a rubber boat from a store that had several hanging from trees out front as advertisements.

Employees at the shop said they had sold well over 3,000 boats in the last week. The brisk business is a measure of the fear gripping Bangkok and a reflection of the tragedy of neighboring provinces that have been submerged for weeks. Several buyers said they needed boats because their submerged homes outside the capital were no longer accessible by road.

Three months of relentless monsoon rains have caused the worst flooding in Thailand in more than half a century, triggering a national crisis that has overwhelmed Yingluck’s government online payday loans.

The water has crept from the central plains south toward the Gulf of Thailand for weeks, engulfing a third of the country and killing nearly 400 people and displacing 110,000 more. Now, Bangkok is in the way _ surrounded by behemoth pools of water flowing around and through the city via a complex network of canals and rivers.

On Friday, army trucks dumped thousands of sandbags outside the riverside Siriraj Hospital, where Thailand’s ailing and revered King Bhumibol Adulyadej has stayed since 2009.

Elsewhere along the Chao Phraya, dozens of monks at the 200-year-old Temple of the Dawn stacked hundreds more along a secondary barrier to protect against river overflows.

“It’s likely going to get higher, but I don’t think its going to get high enough to cause chaos,” said Phramaha Abhin, a 42-year-old monk. Still, he said, “we cannot neglect the risk to this temple. It’s one of the country’s landmarks, one of the things Thailand is known for. We have to protect it.”

The State Railway of Thailand said all train services from Bangkok to southern Thailand were suspended after the tracks in Bangkok’s suburbs were submerged by floodwaters.

Thais and expatriates alike continued to leave Bangkok as foreign governments urged their citizens to avoid the threatened city, citing transportation difficulties and shortages of certain food items.

Seven of Bangkok’s 50 districts _ all in the northern outskirts _ are heavily flooded, and residents have fled aboard bamboo rafts and army trucks and by wading through waist-deep water. Eight other districts have seen less serious flooding.

New flooding was reported Friday in the city’s southeast when a canal overflowed in a neighborhood on the outer parts of Sukhumvit Road. And high tides briefly touched riverside areas closer to the city’s central business districts of Silom and Sathorn. But the day passed without major incident.

“It is clear that although the high tides haven’t reached 2.5 meters (8.2 feet), it was high enough to prolong the suffering of those living outside of the flood walls and to threaten those living behind deteriorating walls,” Bangkok Gov. Sukhumbhand Paribatra said.

The flood walls protecting much of the inner city are 8.2 feet high, and Saturday’s high tide was expected to reach 8.5 feet (2.6 meters).

International charity Save the Children said it was concerned that crocodiles and snakes were lurking in stagnant floodwaters it said are growing filthier by the day.

“Every day we see children playing in the water, bathing or wading through it trying to make their way to dry ground,” said Annie Bodmer-Roy, the group’s spokeswoman in Thailand.

The aid group said many families have been left without access to running water or clean toilets.

“There is a very real risk of waterborne or communicable diseases such as diarrhea and skin infections taking hold if families can’t maintain basic standards of hygiene,” Bodmer-Roy said. “It is essential that the risks facing children in this crisis are understood and steps taken to keep them safe.”

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For five years, two of the region’s biggest developers have been working to get NorthPark

Stock futures are falling a day after the Dow Jones industrial average posted its largest gain since early August.

Investors worried that Slovakia might not approve a plan to strengthen Europe’s bailout fund. All 17 countries that use the euro must agree on the plan, which is considered essential to resolving the region’s debt crisis. Sixteen countries have approved it so far.

In the U.S., Alcoa Inc. will become the first major company to report third-quarter results low interest rate personal loans.

Ahead of the opening bell Tuesday, Dow industrial average futures are down 35, or 0.3 percent, at 11,333. Standard & Poor’s 500 futures are down 6, or 0.5 percent, at 1,185. Nasdaq 100 futures are down 6, or 0.3 percent, at 2,271.

The Dow rose 330 points Monday, its largest gain since Aug. 11.

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The leaders of Germany and France, the eurozone’s two biggest economies, said Sunday they have reached an agreement about how to strengthen Europe’s shaky banking sector amid the region’s debt crisis.

“We are determined to do the necessary to ensure the recapitalization of Europe’s banks,” German Chancellor Angela Merkel following talks with French President Nicolas Sarkozy in Berlin.

A “comprehensive response” to the eurozone’s debt crisis will be finalized by month’s end, including a detailed plan on recapitalizing the banks, Sarkozy said at Berlin’s chancellery.

“The economy needs secure financing to ensure growth. There is no prospering economy without stable banks,” he said. “That is what is at stake.”

However, both leaders declined to name a price tag for the new measures or elaborate further, saying the proposal must first be discussed with other European leaders.

Analysts have urged the eurozone to identify all the banks in the region that need to replenish their capital reserves, then decide whether to compel them to raise that money on the open markets and to provide government financing to the ones that can’t.

Many experts say the capital cushions of many European banks must be strengthened in order to withstand a possible government bond default by Greece. Some analysts fear that a Greek default could cause a severe credit squeeze that would even threaten banks not exposed directly to Greece’s debt because banks could be afraid to lend to each other.

The credit freeze following the collapse of U.S. investment bank Lehman Brothers in 2008 choked off lending to the wider economy and caused a deep recession.

Merkel did not provide details Sunday about how the recapitalization would work, saying only that all banks across the eurozone would be measured by the same criteria in coordination with, among others, the European Banking Authority and the International Monetary Fund.

Any solution must be “sustainable,” Merkel added.

Sarkozy said the French-German accord on the proposal “is total.”

Germany and France will now submit their proposal to shore up Europe’s shaky banking sector to other European Union governments ahead of an Oct. 17-18 summit of the bloc’s 27 leaders in Brussels, they said.

Both leaders expressed confidence that a comprehensive European response to the crisis will be finalized before a summit of the G-20 most developed nations in France Nov. 3-4.

“The global economy needs this summit to become a success, and the European Union will do its part” to ensure a positive outcome, Merkel said.

The IMF has said banks across the continent might need up to euro200 billion ($267 billion) in new capital. The EU disputes the IMF’s estimate, but has warned that lending between banks and from banks to businesses is threatening to freeze up.

Earlier this week, Merkel said that banks must first seek to raise new capital on the market before turning to their government, insisting that the eurozone’s newly strengthened euro440 billion ($590 billion) bailout fund would then only serve as a backstop if a member state can’t cope with shoring up its banks’ capital.

France, however, was reported to favor turning to the fund’s resources right away instead of relying on a national facility to re-capitalize its banks _ who are among the biggest holders of Greek bonds.

But Sarkozy sought on Sunday to dispel the notion of different approaches regarding the European Financial Stability Facility, saying “there are no disagreements.”

German Finance Minister Wolfgang Schaeuble and his French counterpart, Francois Baroin, also took part in the two leaders’ discussions.

Merkel and Sarkozy were set to have a working dinner following the news conference they gave at the chancellery.

Germany and France, which together represent about half of the 17-nation currency zone’s economic output, regularly hold talks before EU summits to chart out joint positions.

The implosion of Belgian lender Dexia following its sizable exposure to Greek and other eurozone sovereign debt, meanwhile, added a sense of urgency to the talks.

France, Belgium and Luxembourg announced Sunday they had approved a plan for the future of the embattled bank, but they offered no details. France and Belgium became part owners of the bank during a euro6 billion ($7.8 billion) 2008 bailout.

While an all-out Greek default appears unlikely, bondholders might still face severe losses, with some analysts maintaining that Greece’s debt must be cut by about 50 percent or more to attain a sustainable level.

Private bondholders agreed in July to take about a 20 percent cut on their holdings of Greek bonds as their participation in a second international euro109 billion bailout for the country.

But Finance Minister Schaeuble on Sunday joined Merkel and other eurozone officials in hinting that the agreement might have to be renegotiated.

“It is possible that we have so far assumed an insufficient percentage of debt reduction,” he told German newspaper Frankfurter Allgemeine Sonntagszeitung.

Such a move will be discussed after the so-called troika of Greece’s international creditors _ European Central Bank, European Commission and IMF _ submits its next progress report later this month, Schaeuble was quoted as saying.

Greece is currently struggling to meet budget and reform targets, but it needs an over all positive progress assessment by the troika to qualify for the next euro8 billion ($11 billion) installment of its euro110 billion package of international bailout loans to avoid bankruptcy.

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Forecasters say a weakening Hurricane Ophelia is expected to pass near Newfoundland, Canada, early Monday.

The National Hurricane Center in Miami said early Monday that Ophelia was still a Category 1 storm with top sustained winds of about 75 mph (120 kph). The storm was moving northeast at 43 mph (69 kph).

Ophelia was centered about 185 miles (295 kilometers) west-southwest of Cape Race, Newfoundland, and a tropical storm watch was in effect for Newfoundland’s Avalon Peninsula. The center says Ophelia is expected to weaken steadily but should be a strong tropical storm when it passes over the peninsula.

Meanwhile, Tropical Storm Philippe was moving over the central Atlantic and is not expected to affect land.

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Six oil workers who were rescued alive after floating for three days in the Gulf of Mexico are stable and conscious, though suffering from bumps and bruises and sunburnt after weathering a tropical storm, a doctor overseeing their treatment said Monday.

All were transferred from a hospital run by Mexico’s state oil company, Petroleos Mexicanos, or Pemex, to a private clinic, according to Dr. Liliana Santana.

One survivor transferred in a wheelchair was asked how he was feeling, and he responded, “Good.”

A Pemex official also said Bangladeshi oil worker Kham Nadimuzzaman died in the hospital after being rescued. Two other workers were found dead, and rescue crews continued the search for the last of the 10 workers.

The official could not be named because he was not authorized to speak to the news media. Authorities have not given a cause of death or identified the bodies.

Nadimuzzaman was among 10 missing oil workers who evacuated their disabled rig Thursday in a tropical storm and escaped in an enclosed life raft. Seven of them were found alive Sunday.

Pemex identified the survivors as two U.S. citizens, Jeremy Parfait and Ted Derise, Jr., both of Louisiana; and Mexicans Ruben Martinez Velasquez, Eleaquin Lopez, Luis Escobar and Ruben Lopez Villalobos.

Martinez, who was a cook on the boat, was still nervous, unable to sleep and with trembling hands, said his uncle, Roman Cruz, 51, a bricklayer from the port city of Ciudad del Carmen. Cruz said his nephew was rescued from the water, hanging onto a raft.

“He was worried about sharks,” said Cruz, who added that none appeared.

Eleaquin Lopez’s brother, Edy, would only say, “Thank God he’s healthy.”

The workers were found 50 miles (80 kilometers) off the coast of the Gulf state of Campeche by the ship Bourbon Artavaze and taken by helicopter to Ciudad del Carmen, where they were admitted to a Pemex regional hospital.

The fate of the other two Americans, identified previously as Louisiana residents Craig Myers and Nick Reed, was still not clear Monday.

The Mexican navy said four survivors and one of the dead were found in a boat, while three other survivors and a body were found in the water.

All were working for Houston-based Geokinetics Inc. on a liftboat owned by Trinity Liftboat Services based in New Iberia, Louisiana. All four U.S. citizens were from the New Iberia area, including Reed, who is the son of liftboat company owner Randy Reed.

The oil workers called for help Thursday afternoon in the middle of Tropical Storm Nate, which disabled their vessel, the Trinity II, a 94-foot (29-meter), 185-ton liftboat, that can lower legs to the sea floor and then elevate itself above the water level. It was being used as a recording vessel and housing for the crew, and it was in waters about 25 feet (8 meters) deep.

They abandoned the liftboat about eight miles (13 kilometers) offshore of the port of Frontera in the southeastern Mexican state of Tabasco.

Pemex and the Mexican navy led the search by air and sea, which intensified Saturday as the storm moved west toward the coast of Veracruz state. A dozen fishermen also disappeared aboard two shrimp boats in the Gulf during the storm Friday.

Pemex said the search for the oil workers continued with four boats, four Pemex helicopters and two airplanes making overflights.

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Associated Press Writer Antonio Villegas contributed to this report.

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U.S. stock futures are sinking as economic jitters and uncertainty about Europe’s finances fuel another day of selling around the world.

European banking shares fell near two-and-a-half-year lows, dragged down by rumors about the companies’ potential losses on bonds issued by heavily-indebted governments. Earlier, Asian shares took a beating, with major indexes in China and Japan losing more than 2.5 percent.

U.S. markets plunged Thursday in a return to the volatile trading that dizzied traders last week. Bad economic news has forecasters warning that another recession is possible.

Well before the market opens, Dow Jones industrial average futures are down 150, or 1.4 percent, at 10,867. S&P 500 futures are down 15, or 1.3 percent, at 1,128. Nasdaq 100 futures are down 22, or 1 percent, at 2,060.

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Racing to avoid a government default, President Barack Obama and Republican congressional leaders reached urgently for a compromise Sunday to permit vital borrowing by the Treasury in exchange for more than $2 trillion in long-term spending cuts. Senate Republican Leader Mitch McConnell said the two sides were “really, really close” to a deal after months of partisan fighting.

A few hours later, Senate Majority Leader Harry Reid issued a statement saying he had signed off on a pending agreement, subject to approval by the Democratic rank and file.

But that was met by conspicuous silence from the White House, McConnell and House Speaker John Boehner’s office, two days before a deadline to raise the federal debt limit and enable the government to keep paying its bills.

Privately, officials said a final sticking point concerned possible cuts in the nation’s defense budget in the next two years. Republicans wanted less. Democrats pressed for more in an attempt to shield domestic accounts from greater reductions.

As contemplated in talks that McConnell and Vice President Joe Biden were negotiating, the federal debt limit would rise in two stages by at least $2.2 trillion, enough to tide the Treasury over until after the 2012 elections.

Big cuts in government spending would be phased in over a decade. Thousands of programs _ the Park Service, Labor Department and housing among them _ could be trimmed to levels last seen years ago.

No Social Security or Medicare benefits would be cut, but the programs could be scoured for other savings. Taxes would be unlikely to rise.

Any agreement would have to be passed by the Democratic-controlled Senate and Republican-controlled House before going to the White House for Obama’s signature. With precious little time remaining, both houses were on standby throughout the day, and Speaker John Boehner was in his office.

Without legislation in place by Tuesday, the Treasury will not be able to pay all its bills, raising the threat of a default that administration officials say could inflict catastrophic damage on the economy.

If approved, though, a compromise would presumably preserve America’s sterling credit rating, reassure investors in financial markets across the globe and possibly reverse the losses that spread across Wall Street in recent days as the threat of a default grew.

Senate Majority Leader Harry Reid, D-Nev., said he was “hopeful and confident” a deal would come together. But in a possible hint of dissatisfaction, he pointedly made no mention of congressional Democrats when he said negotiations were between McConnell and the White House and unnamed others.

Officials familiar with the negotiations said that McConnell had been in frequent contact with Vice President Joe Biden, who has played an influential role across months of negotiations.

The talks were proceeding toward a two-step system for raising the debt limit and cutting spending.

The first step would take place immediately, raising the debt limit by nearly $1 trillion and cutting spending by a slightly larger amount over a decade.

That would be followed by creation of a new congressional committee that would have until the end of November to recommend $1.8 trillion or more in deficit cuts, targeting benefit programs such as Medicare, Medicaid and Social Security, or overhauling the tax code. Those deficit cuts would allow a second increase in the debt limit, which would be needed by early next year.

If the committee failed to reach its $1.8 trillion target, or Congress failed to approve its recommendations by the end of 2011, lawmakers would then have to vote on a proposed constitutional balanced-budget amendment.

If that failed to pass, automatic spending cuts totaling $1 online payday loan lenders.2 trillion would automatically take effect, and the debt limit would rise by an identical amount.

Social Security, Medicaid and food stamps would be exempt from the automatic cuts, but payments to doctors, nursing homes and other Medicare providers could be trimmed, as could subsidies to insurance companies that offer an alternative to government-run Medicare.

Officials describing those steps spoke on condition of anonymity, citing both the sensitivity of the talks and the potential that details could change.

The emerging deal could mark a classic compromise, a triumph of divided government that would let both Obama and Republicans claim they had achieved their objectives.

As the president demanded, the deal would allow the debt limit to rise by enough to tide the Treasury over until after the 2012 elections.

But barring a change, it appeared Obama’s proposal to extend the current payroll tax holiday beyond the end of 2011 would not be included, nor his call for extended unemployment benefits for victims of the recession.

Republicans would win spending cuts of slightly more than the increase in the debt limit, as they have demanded. Additionally, tax increases would be off-limits unless recommended by the bipartisan committee that is expected to include six Republicans and six Democrats. The conservative campaign to force Congress to approve a balanced-budget amendment to the Constitution would be jettisoned.

Congressional Democrats have long insisted that Medicare and Social Security benefits not be cut, a victory for them in the proposal under discussion. Yet they would have to absorb even deeper cuts in hundreds of federal programs than were included in Reid’s bill, which many Democrats supported in a symbolic vote on the House floor on Saturday.

As details began to emerge, one liberal organization, Progressive Change Campaign Committee, issued a statement that was harshly critical.

“Seeing a Democratic president take taxing the rich off the table and instead push a deal that will lead to Social Security, Medicare and Medicaid benefit cuts is like entering a bizarre parallel universe _ one with horrific consequences for middle-class families,” it said.

While politically powerful business groups like the Chamber of Commerce are expected to support the deal, tea party organizations and others have looked disapprovingly on legislation that doesn’t require approval of a balanced-budget amendment.

If they keep to that position, it could present Boehner a challenge in lining up enough votes to support a compromise, just as Obama may have to stand down rebels within his own party.

The day began with optimistic statements in televised interviews by McConnell and White House officials, then quickly reverted to a reminder of the fierce partisanship of the past several weeks.

Soon after the Senate convened, Republicans blocked legislation Reid had advanced several days ago as part of an outbreak of brinkmanship with Boehner and the Republicans. The vote was 50-49, or 10 short of the 60 votes needed to advance the bill.

The vote was of no consequence in the fate of the separate efforts to avoid default.

Those talks were unfolding along lines determined by McConnell and Biden, and it was unclear how much more time would be needed.

On the Senate floor, Reid told lawmakers they could leave the Capitol while awaiting developments. “I would not suggest a ball game, though, maybe closer,” he said.

A little over a mile away, on a hot, sunny Sunday, the Washington Nationals were playing host to the New York Mets.

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