the cbs evening news with scott pelly is up next. >> 30 minutes. crisis. they talk of progress, but what does washington have to show for it as time slips away? >> we stand a good chance of defaulting. and defaulting would have a potentially devastating effect on our economy. >> pelley: we have the latest on this breaking story. major garrett at the white house. nancy cordes at the capitol. and we'll speak to one of wall street's leading investors. >> there's no deal unless the treasury stops paying people then it's armageddon. >> pelley: plus washington insight from bob schieffer. one of the world's most-wanted terror suspects arrives in new york city. david martin on abu anas al-libi facing charges in the american embassy bombings. captioning sponsored by cbs

this is the "cbs evening news" with scott pelley. >> pelley: good evening. it is now 14 days and counting for the government shutdown. t-three days and counting to a possible government default. tonight there are signs of real progress toward ending this stalemate. senate leaders have been meeting on and off all day and appear to be near an agreement that could reopen the government and raise the government's borrowing limit the so-called debt ceiling, so that it can pay its bills. but they are not there quite yet and with the threat of default still hanging over america, we have a team of correspondents looking at where the talks stand how we got here, and what might happen if the government can't pay all its bills. first we'll go to nancy cordes at the capitol. nancy, what's new today? >> reporter: well, scott, senate leaders are putting the finishing touches tonight on a deal that would fund the government for the next three months and raise the debt ceiling for four months, just a

short time ago on the senate floor the senate majority leader harry reid said they're making tremendous progress but that they're not quite there yet. harry reid shuttled back and forth today between his office and the office of his republican counterpart, mitch mcconnell. they were crafting a deal to reopen the government and fund it through january 15 while raising the debt ceiling through february 15. >> constructive good faith negotiations continue between the republican leader and me. >> reporter: for the first time in weeks the two leaders seem to be on the same page. >> i share his optimism that we're going to get a result that will be acceptable to both sides. >> reporter: the plan calls for both sides to anoint negotiators to find deficit cuts between now and december 15. those cuts might be used to replace the indiscriminate across-the-board cuts known as sequestration. the plan also establishes a new income verification policy to

prevent fraud among americans seeking subsidies to buy health insurance under obamacare. that was a small concession to house republicans who triggered the shutdown when they tried to tie government funding to defunding or delaying the president's health care law >> we've wasted a couple months focused on the wrong subjects. >> reporter: tennessee republican senator bob corker says a strong bipartisan vote for the plan in the senate would be the key to convincing house republicans to go along. >> this will give us a framework to move our nation ahead without threatening default, without keeping the government shut down and i think it is a very positive step. >> reporter: leader mcconnell is going to brief senate republicans on the plan in the morning. but even if there are no snags, it still takes time to hold votes in the senate and the house so the earliest, scott, that we could see the government reopened is mid to late this week. >> pelley: nancy, hang in there with us just a moment, let's

bring in major garrett at the white house. major, there was a late meeting scheduled between the president and the senate leaders but it was canceled. is that a sign of trouble? >> reporter: not at all, scott. it's actually a sign of progress. the original idea was the for the president to receive a status up date this afternoon but when negotiations picked up speed and a deal looked to be in sight the president decided to get out of the way and the white house also knows all too well scott that anything the president says right now that could aggravate senate republicans or house republicans probably ought not to be said. >> pelley: so will the president take the deal nancy described a moment ago? >> everyone here at the white house tells me the president will, scott, because the president believe this is deal reopens the government and takes away the specter of default with no strings attached. that means almost entirely on his terms. the white house does not object to income verification for the president's health care law because they see it will build possibly greater public confidence as the law is implemented. the white house also wanted to avoid default until well after the holiday season with the february 15 date that that's also achieved while separating--

if this comes up again early next year-- shutdown from default is also achieved. the white house back this is deal. >> pelley: switching back to nancy. with the senate and white house nearly in agreement of course you still need the house of representatives where this standoff started in the first place. nancy, will this deal sail through the house? >> well, tea party republicans won't like it because obamacare emerges essentially unscathed but the mainstream republicans in the house we've spoken to today said they're withholding judgment. they want to see the plan, they're going to be meeting about it in the morning. they are well aware, however, scott, that there aren't any other legislative options at this point. especially after their talks at the white house fell apart over the weekend. >> pelley: nancy cordes, major garrett, thanks very much. all of this is about to rest on the shoulder of the leader of the republicans, the speaker of the house, john boehner. chip reid has insight on all of that for us this evening. chip? >> reporter: scott, this afternoon speaker boehner walked over to the senate side of the capitol and received an update

on the negotiations from senate republican leader mitch mcconnell. boehner will still soon have to make a decision of enormous consequence and the split in his party isn't making it any easier. it's no surprise that speaker john boehner sometimes shows his frustration. >> i get the "wall street journal" out and it says we don't care how long this lasts because we're winning. this isn't some damn game! >> reporter: after all, in one of the highest stakes negotiations in years he's the man in the middle, feeling the pressure from all sides, especially from competing factions within his own party. when president obama was reelected last year, boehner said obamacare was the law of the land. that infuriated tea party republicans who set about trying to change his mind. they were backed up by a multimillion dollar campaign funded by conservative outside groups. >> obamacare is dangerous. it can't be implemented. >> reporter: there are only

three or four dozen staunch tea party republicans in the house, but they have influence with conservative activists across the country. some tea party elements tried to oust boehner as speaker earlier this year. eager to avoid another revolt, he joined forces with the tea party last month and demanded that the president's health care law be repealed or delayed as part of a deal to avoid a government shutdown. >> the american people don't want the government shut down and they don't want obamacare. (cheers and applause) >> reporter: but last week, boehner changed course again, dropping his demand that obamacare be part of a deal. >> i don't want anything on the table, i don't want to take anything off the table. >> reporter: this time, the pressure to switch came from mainstream house republicans. boehner had promised them with the debt limit deadline looming that he would not allow the nation to default. if there is a deal in the senate boehner will face a dilemma: he can either allow the house to vote-- which will likely split the republican party in two and create a major backlash from the tea party-- or, scott, he can

refuse to allow a vote, which could lead to default. >> pelley: chip reid in our washington newsroom. chip, thanks very much. now, the treasury says the deadline for raising america's borough limit is thursday and here's what they mean by that. the government borrows 20 cents out of every dollar it owes. when the debt ceiling is reached, the government can't borrow that 20%. treasury would have to choose which bills to pay and default on the others. it's happened before-- once momentarily in the 1970s because of a mistake and in 1814 when the british set fire to washington. hope that history won't be repeating itself sent stock prices higher after a triple- digit decline in early trading. the dow ended with a gain of 64 points, closing at 15,301. anthony mason is our senior business correspondent. anthony, everyday we end the day with no deal. why is wall street optimistic?

>> i think, scott, because we've been here before back in 2011. it looks scary but it turned out okay in the end. but there is evidence the economy is taking a hit. both goldman sachs and moody's estimate the uncertainty in washington, the government furloughs, have cut about a half percentage point off of our economic growth. for a country only growing about 2% a year, that's a pretty big hit. >> pelley: what have wall street firms done to prepare for the possibility of default? >> well, fidelity and j.p. morgan have sold off short term u.s. government debt. but there has not been a stampede to the exits on u.s. treasuries. in fact, the selloff isn't yet as bad as it was two years ago and that, of course, is when the u.s. credit rating was downgraded. >> pelley: sounds like near-term pessimism, long-term optimism? >> if this gets worse you will see wall street scared, but they're not scared yet. >> pelley: anthony, thanks very much. one of the biggest losers in a u.s. default would be china. have a look at this: the u.s. debt is more than $16 trillion. $5 trillion of that the

government owes to itself in the form of bonds which leaves nearly $12 trillion held by investors. china owns $1.3 trillion of that. seth doane is in beijing where there was a sharp reaction to a u.s. default. >> reporter: good evening to you scott. china's investment in u.s. sdet made at the highest levels of the communist party here and managed far from public view. but the state news agency made a very public and scathing commentary saying that the u.s. debt crisis should prompt a "de-americanized world." meaning that the u.s. dollar should not be at the center of the world economy. what that commentary did not say but some have speculated might be behind it is that china's currency could one day play that role. >> pelley: seth, thank you very

much. there's a little less chaos in the national parks today with 350,000 federal workers still furloughed most of those parks are still closed, but mount mount rushmore in south dakota reopened today with money from the state and corporate sponsors. arizona is paying $393,000 a day to keep the grand canyon national park open and the statue of liberty reopened to the public yesterday. the state of new york is paying more than $61,000 a day for that. federal courts, of course, have remained open and tomorrow one of the world's most notorious terror suspects, abu anas al-libi, is due to be charged in federal court in new york. david martin is following that case. >> reporter: one week after his capture by american commandos, abu anas al libby is in a prison cell in new york where he is expected to stand trial in his role of two american embassies

in africa. al-libi was snatched from his car in front of his house and family in the libyan capital of tripoli in a daring daytime raid by delta force commandos a week ago saturday. he was held aboard the u.s. navy ship "san antonio" in the mediterranean where he was questioned by counterterrorism experts. they planned to interrogate him for weeks but al-libi, who suffers from a chronic health condition identified as hepatitis-c began refusing food and water and his questioning was cut short. a federal official told cbs news al-libi answered at least some questions before he was flown to stewart air national guard base outside new york city over the weekend. al-libi is expected to appear in court tomorrow. new that he's in the u.s. justice system, he has the same rights as any other defendant, including the right to remain silent. >> pelley: david martin at the pentagon tonight. david, thank you very much. cattle ranchers have been devastated by an early snowstorm that buried their herds.

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eventually i noticed that i had these little blisters up on my forehead and they started spreading. the blistering and the rash was moving down towards my eye. the doctors at the emergency room recommended that i have it checked out by an eye doctor. there was concern about my eyesight. i eventually learned that if i had chickenpox i was susceptible to getting shingles as an adult. i couldn't do the things i loved because of the pain. when i had shingles the music stopped. >> pelley: giant burial pits have been dug in the black hills of south dakota for cattle lost in a surprise snowstorm ten days ago. as many as 100,000 led feared dead and

financial losses may be as high as $125 million. the federal government shutdown has only made things worse. manuel bojorquez talked to some of the ranchers. >> reporter: nothing could prepare scott and his wife angela for what the melting snow has revealed. so there are parts out there where there were dead cows as far as the eye could see in >> yes. >> pelley: what was that like to see? >> after a while you almost get numb. you come upon another one and you come upon another one. >> pelley: >> we just -- we were just, well what can you do? >> reporter: south dakota's cattle were still in summer pastures when the blizzard hit. they had not grown out their winter coats. the animals were fully exposed to blinding snow and 70 mile per hour winds. some wandered for miles before collapsing and suffocating in snowdrifts. >> the day after the storm i started counting cattle that were dead of ours and, you know,

i just -- i had the -- i got sick to my stomach. >> reporter: these tags belonged to the 200 animals he lost, that's nearly half his herd. other ranchers lost everything. >> my biggest fear is that people that lost livestock won't be able to recover. you pray for them and you hope that, you know, they get guidance and have the ability to big out of that, but that's a big hole. >> reporter: ranchers can't report their losses to the agriculture department because government offices are closed and relief programs that might offer help part of a farm bill that has been delayed by congressional gridlock. >> it affects not only the ranchers but it affects the business people. it's just such a large trickle effect. it's going to be seen for a long time to come in this area. >> pelley: as devastating as this is here, consumers probably will not see a big increase in beef prices because south dakota provides only a fraction of the

nation's supply. but scott, the reader family's loss already exceeds $250,000. >> pelley: manuel, thanks. last week, we reported on a break in a 22-year-old murder case. the victim was a little girl known only as baby hope. her body had been found in a cooler in new york city. last week, detectives finally located her mother thanks to a tip and d.n.a. testing linked the woman and the child. now the girl's cousin has been arrested and charged with her murder. her headstone had long read "the identity of this little girl is unknown" but over the weekend new york city police added her name: angelica castillo. in a moment, we will talk to a top wall street investor about the prospect of default in three days. is there going to be panic after the 17th? want to give your family the very best in taste, freshness, and nutrition?

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>> pelley: as washington was dealing with its economic crisis today three americans were awarded the nobel prize in economics. professors robert schiller of yale and eugene fafa and lars peter hansen of the university of chicago were cited for their work in determining how assets such as stocks and real estate are valued. one of america's leading investors says that washington is risking disaster in this debt crisis. tony james is president and chief operating officer of the blackstone group which manages

the $230 billion for public and corporate pension funds. we spoke with james a short while ago and asked about that thursday deadline when the treasury department says it will not be able to pay all of america's bills. if a deal isn't done by the 17th what are the consequences? >> well, i think there's some cushion after the 17th. i would think most people think at least until the beginning of november you are okay. if there's no deal and the treasury stops paying people then it's armageddon. >> pelley: armageddon? what do you mean? paint the picture for me. >> the stock market would plummet, you'd have a default on treasury security which is would cause margin calls, the financial system could freeze up. >> pelley: freeze up in the way we saw in 2008? >> yes. >> pelley: that's a pretty dire prediction. >> very dire. >> pelley: do you think the politicians in washington understand what you're talking about? >> i don't think they do.

i think they think that those that are willing to go to the brink think smaller government is better and if there are less payments, there's less payments. i don't think they understand the damage it's doing to american perception abroad. >> pelley: is there going to be panic after the 17th? >> no, i don't think there's panic until the government stops paying people. once that happens, yes, panic will ensue. >> pelley: in on op-ed piece you wrote for the "wall street journal" you likened what's happening in washington to russian roulette and you said you couldn't figure out why they were doing it. why do you say that? >> because they're playing with a lot of risk for small or no gain. they're spinning the cylinder on the gun and more often than not they'll be fine. we'll work out some kind of system if we go to the brink but there's that one in whatever chance that that's not the case and then the consequences are very, very severe. >> pelley: but tony james told us he is still optimistic there will be a deal. in new york there was quite a

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money to pay its bills until early next year. if that passes with a big bipartisan senate vote, the leaders believe it would be hard for the house not to go along. that is a big "if" and i'm not so sure. but if they are right, the government would start up again and the united states would be spared defaulting on its debts. but the other part is nothing would be resolved. congress is just kicking can t can down the road until next year when the new deadlines would kick in and we'd go through all this again. we may be running short as statesmen, but we are developing some of the best can-kicker it is world has ever seen. >> pelley: bob, thank you. we'll be following this tomorrow. that is the "cbs evening news" for tonight. and for all of us at cbs news all around the world, good night. captioning sponsored by cbs captioned by media access group at wgbh access.wgbh.org

not one, but two bay area transit emergencies to worry about tonight: first, bart. now, all of a sudden, a-c transit. good evening, i'm elizabeth cook. i'm ken bastida. team coverage tonight on the strikes threatening to cripe the bay area commute. juliee goodrich on a surprise stri notice from a-c transit. but first we start with phil ma in oakland... where both sis of the bart dispute just spe in the past hour. first, we start with phil matier in oakland where both sides the b.a.r.t dispute just spoke in the past hour. phil, what did they say? >> reporter: quite a bit, ken, but it was short and sweet. after a day of talks they delivered a 1-2 pump you have to hear to believe. >> we apologize -- punch you

will have to hear to believe. >> we feel we have to give notice that unless something breaks there will be a strike. >> we think we have a great offer on the table. we have a 12% base wage increase they will get regardless. also, if b.a.r.t ownership and revenue is going faster than we project, we will share that with our riders. they can get up to a thousand dollars a year additional. >> we are weary, everyone is tired. but it is not having come down here and shove a deal down people's throats. if this is what they plan to d this is the reason we are headed for a strike at midnight. >> reporter: in addition to the financial questions there are also work rules that have