Among the elements of the plan, so far just an outline, are discretionary-spending caps and tax-code changes, including unspecified “reform” to produce $133 billion by 2021 to bolster the Highway Trust Fund without a gas-tax hike.

Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) also were working on a modified version of a back-up plan McConnell proposed on July 12. That proposal would allow Obama to raise the debt limit by $2.5 trillion in three stages over about 12 months, starting with an initial $700 billion.

It also would direct Obama to propose spending cuts equaling the debt-ceiling increases. But Congress would be able to revise Obama's menu of reductions, probably sparking a partisan fight over which cuts would become law.

Spending Cuts May Follow

If there is a debt deal that includes spending reductions, “There's no avoiding further cuts for federally funded construction,” Simonson says.

Murray says, “If you're having added pressure in terms of reducing spending and you're focusing on discretionary programs, as opposed to going after Social Security or Medicare or Medicaid, then public works is certainly a likely candidate for cuts.”

But Basu says if a spending-cut package is shaped in a way the bond market likes, “that would create conditions for the private sector-led recovery that the industry needs to offset the anticipated declines in federal [infrastructure] investment.”