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Senate leaders say they're optimistic of an eleventh-hour bipartisan agreement on Wednesday that would avoid a government default after their House colleagues failed to produce a plan that could pass muster.

Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) were set to pick up the pieces from the fractious and fruitless night in the House that accomplished little more than running down the clock.

"Given tonight's events, the Leaders have decided to work toward a solution that would reopen the government and prevent default," Don Stewart, a spokesman for McConnell, said in a statement. "They are optimistic an agreement can be reached."

Their effort to forge a deal acceptable to both parties to restart the government and renew its authority to borrow was given urgency on Tuesday by a warning issued by Fitch Ratings, the third-largest credit rating agency, which said the debacle in Washington meant it was placing the country's long-term credit rating under review for a potential downgrade.

If you haven't been following every twist and turn, here are the latest events from each chamber:

In The House:

On Tuesday evening, House Republicans tried and failed to produce their own plan for ending the stalemate, but in the end it wasn't Democrats who scuttled their efforts, but divisions among GOP lawmakers.

In the early evening, the House had crafted a plan to end the shutdown and raise the debt ceiling in exchange for some changes in the Affordable Care Act, which has been a key stumbling block throughout the weeks of negotiations. But when Heritage Action for America, a lobby group affiliated with the conservative Heritage Foundation weighed in against the plan, what little resolve that might have existed Republicans quickly evaporated.

As Politico writes of House Speaker John Boehner:

"[Battered] from three years of intra-party battles, [he] was caught between at least three different GOP factions as he tried to craft a compromise agreement: Republicans who didn't want to slash government health care contributions for Capitol Hill aides, members who thought repealing the medical device tax was a giveaway to corporate America and conservatives, who thought Republican leaders were too soft on Obamacare.

Boehner was unable to craft a deal that would satisfy all of the groups, forcing him to shelve his plan and show the world — again — just how hard it is for him to rule the raucous House Republican Conference.

No amount of political gymnastics would help him reach the crucial 217 vote-level to send a bill to the Senate. GOP aides said that Boehner was — at a minimum — 20 to 30 votes short of the target."

The U.S. Supreme Court will hear arguments in two cases on Wednesday — one that focuses on the right against self-incrimination and another that looks at when prosecutors can seize defendants' assets.

What Counts As Self-Incrimination?

The first arguments before the court Wednesday come in a murder case that tests whether a court-ordered psychiatric exam can be used to rebut a defendant's claim that he had not formed the necessary intent to kill. The defendant claims that using the examination violated his constitutional right against self-incrimination.

In 2005, Scott Cheever shot and killed a sheriff during the course of an arrest. Cheever, then 24, had been addicted to methamphetamines since he was 17. He claimed that at the time of the killing, he had not slept in nine days, had just injected a near-lethal dose of the drug and was incapable of exercising judgment when the sheriff came to arrest him. In short, he contended that he was incapable of forming the necessary intent to kill — an element that is required to qualify a defendant for the death penalty.

The case took tortuous legal turns, dragging its way through both state and federal court, before Cheever was finally convicted in state court and sentenced to death.

The appeal of that conviction centers on a psychiatric exam that took place at the early stage of the case, prior to trial, and over defense counsel's objection. A federal judge ordered the psychiatric exam when Cheever's lawyer first notified the federal court that the defense intended to argue that Cheever did not have the requisite intent to kill.

For unrelated reasons, the federal prosecution was eventually dropped in favor of a state prosecution. But when the case went to trial in state court, Cheever pressed the same argument. The defense called its own expert witness to testify about the short- and long-term effects of methamphetamine use. That expert testified that Cheever was experiencing paranoid psychosis and could not have exercised any judgment when he killed the sheriff.

In response, the state called the psychiatrist who had conducted the court-ordered examination at the earlier stage of the case. That doctor testified that, while Cheever had antisocial personality disorder and was "impressed and awed" by "outlaws," his mental state at the time was not significantly altered. In short, that the defendant could have intended to kill the sheriff.

The Kansas Supreme Court subsequently voided the conviction. It ruled unanimously that the state had violated Cheever's Fifth Amendment right against self-incrimination by calling the state's psychiatrist to testify.

The state then appealed to the U.S. Supreme Court, where the justices will hear arguments on Wednesday. The state argues that Cheever voluntarily waived his right against self-incrimination by introducing evidence of his mental state. Cheever's attorney counters that presentation of evidence of mental state is not a waiver of the right against self-incrimination.

What Can Prosecutors Seize Before Trial?

The second of the two cases being argued Wednesday tests under what circumstances prosecutors may seize a defendant's assets prior to trial. The defendants in the case claim the seizure of their assets is unconstitutional because it makes it impossible for them to pay their chosen lawyers to conduct a defense.

When the government began investigating Kerri and Brian Kaley for allegedly selling stolen medical supplies, the Kaleys fought back, contending that the medical supplies were not stolen at all. They knew that identical charges in another case had ended in a not-guilty verdict. So, they took out a $500,000 loan on their home and put it into a CD to pay their lawyers for a trial.

Federal prosecutors, however, then sought to freeze all their assets — an action that the Kaleys contend denied them the right to counsel and due process of law.

The couple is asking the Supreme Court to set down rules requiring a pretrial evidentiary hearing prior to allowing the seizure. Prosecutors counter that such a hearing would essentially be a mini-trial, giving defendants two bites at the apple after they are tried.

The case could have a significant impact on both prosecutors and defense lawyers. Groups on the right and the left have filed briefs on behalf of the Kaleys. They say that if the court sides with the Kaleys, it would deprive prosecutors of a heavy weapon used too aggressively and frequently to force guilty pleas on unwilling defendants. On the other hand, prosecutors contend that a decision favoring the Kaleys would encourage white-collar defense lawyers to represent wealthy defendants, regardless of the fact that the lawyers are being paid with their clients' ill-gotten gain.

Isaac Chaput contributed to this report.

The Supreme Court has agreed to review an Obama administration policy that requires new power plants and other big polluting facilities to apply for permits to emit greenhouse gases.

To get these permits, which have been required since 2011, companies may have to use pollution controls or otherwise reduce greenhouse gases from their operations — although industries report that so far they haven't had to install special pollution control equipment to qualify for the permits.

The rule is part of a larger effort by the EPA to regulate greenhouse gases.

The EPA started with automobiles. It determined that once it did that, it was "compelled" by the Clean Air Act to also require greenhouse gas permits when companies want to construct big new facilities. The statute requires permits for all facilities that are major polluters of "any air pollutant." And the EPA has long interpreted this to mean any pollutant that is regulated under the Clean Air Act.

The utilities, manufacturers and chemical companies that petitioned the Supreme Court challenge EPA's decision. They argue that the EPA should have interpreted "any air pollutant" to mean only pollutants that have health-based ambient air quality standards, such as ground-level ozone, according to Jeffrey Holmstead, an industry lawyer who headed EPA's air pollution program under the Bush administration.

Furthermore, industry groups argue that getting these permits causes delays in big projects that could help revive the economy.

The U.S. Court of Appeals for the District of Columbia decided in 2012 that the EPA got it right.

In its decision, the appeals court cited a 2007 Supreme Court decision, Massachusetts v. EPA, which affirmed the EPA's determination that greenhouse gases are a pollutant under the Clean Air Act.

That Supreme Court ruling also upheld the EPA's finding that greenhouse gases endanger public health and the Obama administration's authority to regulate greenhouse gases from automobiles.

The Supreme Court is expected to take up the case on the greenhouse gas permits for large polluters early next year.

These greenhouse gas permits are not the same as the greenhouse gas regulations that the Obama administration has been drafting over the last couple years.

The EPA last month released a second proposal for how it wants set limits on how much greenhouse gases new power plants can release. President Obama says he also intends to regulate greenhouse gases from existing power plants, but has yet to release a proposal.

If you don't pay your electric bill on time, probably you'll get charged a buck or two in interest. As long as you pay off the balance in a reasonable amount of time, your lights will stay on.

So why is it such a big deal that the Treasury Department may soon be unable to pay all of its bills on time?

U.S. Treasury securities are used as both currency and collateral for countless financial transactions around the world. Think dozens per minute.

Right now, Treasurys are almost as liquid and secure as cash. If investors are at all nervous that they might not be honored, this could have a cascading effect that will cause stock markets to tumble, the dollar to lose value and unemployment to rise.

"If Treasury bonds were no longer seen as risk-free, that would have implications for virtually all collateralized loans, which is a huge proportion," says Phillip Swagel, a University of Maryland economist who served as assistant Treasury secretary for economic policy under President George W. Bush.

"If people couldn't hold Treasurys, they would have to hold a lot of cash," he says. "We don't want people to feel like they have to hoard cash to make transactions."

Still A Big 'If'

Note that Swagel is still using the word "if." No one knows whether time will run out on the Treasury Department's authority to raise money.

Technically, it ran out in May, but the department has been able to keep juggling since then. The nominal deadline Congress and President Obama have been working with is Thursday, when the Treasury says it will be unable to borrow any more money by issuing bonds.

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