WASHINGTON — Senate Majority Leader Mitch McConnell said Monday that the next steps for Congress on health care reform are "somewhat murky," but that Republicans in the Senate will talk with Democrats to see what sort of measures the two parties might be able to agree on.

"Obviously we had a set-back," McConnell said at a business lunch in Louisville. "On the effort to make dramatic changes on Obamacare, the way forward is somewhat murky."

Senate Republicans failed to pass any repeal of the Affordable Care Act last month, leaving the Obama-era law intact. They have since dramatically scaled back their plans and hope to pass legislation to stabilize the individual insurance market.

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McConnell appeared alongside Treasury Secretary Steve Mnuchin where they discussed the upcoming fall where Congress faces a full legislative agenda that includes a host of controversial issues dividing the Republican Party.

"There is a zero-chance, no chance we won't raise the debt ceiling. No chance," McConnell said of the looming vote to lift the debt limit that allows the U.S. Treasury to meet its payment obligations. "America is not going to default and we'll get the job done in conjunction with the secretary of the Treasury."

Republicans in Congress, however, are divided on lifting the debt ceiling. Budget and deficit hawks are demanding budgetary reforms, including reductions in spending, in exchange for voting to lift the debt ceiling. But the Trump administration is pushing back and wants it lifted with no strings attached.

"This is about having a clean debt ceiling so that we can maintain the best credit, the reserve currency and be focused on what we should be focusing are so many other important issues for the economy," Mnuchin said.

McConnell and Mnuchin, both of whom are working on tax reform, said that they hope to have more details on a plan when Congress returns in September.

One of the many issues that Republicans are working through is whether tax reforms would be revenue-neutral — meaning spending reductions would have to be made in conjunction with tax cuts — or would rely on growth to make up revenue cuts. McConnell said that a revenue neutral plan is "likely to be where we end up."

Meanwhile, House Republicans held a conference call for members on Monday to discuss the upcoming legislative agenda. On their first week back, the House plans to get to work on the remaining spending bills for next year, according to a House Republican aide whose member was on the call.

Congress also has to pass a reauthorization of the Federal Aviation Administration and the children's health insurance program known as S-CHIP before September 30.