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07.31.105:16 PM ET

Reid Regroups

Harry Reid couldn't shore up the votes to get his debt proposal through the Senate—but he's "confident" a new deal will be reached, as both parties continue talks with the White House.

Inching closer to a last-minute deal to avoid a U.S. default, the Senate voted Sunday afternoon to reject a Democratic approach to resolving the debt issue. But Majority Leader Harry Reid sounded optimistic that a bipartisan deal could be reached soon after his own plan was dispatched.

The vote was 50-49, or 10 short of the 60 votes needed to advance legislation proposed by Reid that would have cut the deficit by $2.4 trillion over 10 years and raised the debt ceiling by $2.2 trillion, enough to cover the government's bills until 2013.

The outcome was expected and was a prelude to closed-door talks between the White House and congressional leaders that were advancing a new plan. A vote is still possible in the Senate late Sunday or early Monday. The deadline for a possible default is Tuesday.

Reid told fellow senators a new deal was "not there yet," but "we are hopeful and confident it can be done."

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