U.S. budget deadline looms

WASHINGTON -- President Barack Obama and congressional leaders failed to reach agreement Thursday night on a compromise to cut spending and head off a midnight government shutdown that no one claimed to want.

Obama, House Speaker John Boehner and Senate Majority Leader Harry Reid all said the differences had been narrowed in a pair of White House meetings. They directed their aides to work through the night in pursuit of a deal.

"I expect an answer in the morning," Obama said in an appearance in the White House briefing room shortly after his second sit-down of the day with the lawmakers.

The comments capped a day in which the president, Reid, D-Nev., and Boehner, R-Ohio, bargained and blustered by turns, struggling to settle their differences over spending cuts and other issues while maneuvering to avoid any political blame if they failed.

With the economy just now beginning to create jobs in large numbers, the president said a shutdown would damage the recovery.

"For us to go backwards because Washington couldn't get its act together is just unacceptable," he said.

White House officials announced Obama had postponed a scheduled trip to Indianapolis for the morning.

Republicans passed legislation through the House at midday to fund the Pentagon for six months, cut $12 billion in domestic spending and keep the federal bureaucracy humming for an additional week.

"There is absolutely no policy reason for the Senate to not follow the House in taking these responsible steps to support our troops and to keep our government open," Boehner said.

Obama flashed a veto threat even before the bill passed on a 247-181, mostly party-line vote.

STATE DELEGATION VOTES ON PARTY LINES

The party-line voting extended to Nevada's lawmakers. Republican Reps. Dean Heller and Joe Heck voted for the one-week extension while Democratic Rep. Shelley Berkley voted against it.

"I've said all along that my goal is to cut government spending, not shut down the government," Heck said.

Heller said the bill would ensure funding for the military while granting a little more time for talks to continue funding the rest of the government.

"In the absence of a funding agreement, this measure is a necessary step to ensure our troops have the resources they need," Heller said.

But Berkley called the vote "a dog and pony show."

"Republicans knew this was never going to see the light of day in the Senate and that the president had promised a veto," Berkley said.

Democrats proposed a one-week alternative they said Obama would accept "but Republicans refused to allow a vote," she said.

Berkley also pulled Yucca Mountain into the debate, saying Republicans "are willing to shut down the government" over a negotiating difference with Democrats that is a fraction of what they would spend to build the nuclear waste repository.

"Nevadans are hearing Republicans say we have to make damaging budget cuts at the same time they are seeing these same Republicans push for $100 billion in spending to turn Nevada into a nuclear waste dump," Berkley said. "This is absolute hypocrisy at its worst."

The administration issued a statement calling the spending measure "a distraction from the real work" of agreeing on legislation to cover the six months left in the fiscal year.

As they left the White House after the evening meeting, Reid and Boehner issued a brief written statement that said they had narrowed their disagreements and said they would "continue to work through the night to attempt to resolve" the remaining ones.

GOP TARGETS PLANNED PARENTHOOD, EPA

Republicans want deeper spending cuts than the Democrats favor and also are pressing for provisions to cut off federal funds to Planned Parenthood and stop the EPA from issuing numerous anti-pollution regulations.

"They're difficult issues. They're important to both sides and so I'm not yet prepared to express wild optimism," Obama said.

For all the brinksmanship -- and the promise of more in the Senate today -- there was agreement that a shutdown posed risks to an economy still recovering from the worst recession in decades.

The political fallout was less predictable, especially with control of government divided and dozens of new Tea Party-backed Republicans part of a new GOP majority in the House. Twin government shutdowns in the mid-1990s damaged Republicans, then new to power in Congress, and helped President Bill Clinton win re-election in 1996.

This time, individual lawmakers worked to insulate themselves from any political damage. Sens. Sherrod Brown, D-Ohio, and Ben Nelson, D-Neb., both seeking new terms in 2012, became the latest to announce they would not accept their congressional salary during any shutdown.

"If retroactive pay is later approved, I'll direct my part to the U.S. Treasury," Nelson said.

One day before the shutdown deadline, events unfolded in rapid succession.

In a shift in position, Obama said he would sign a short-term measure keeping the government running even without an agreement to give negotiations more time to succeed.

That was one of the options available to Reid, although Boehner said he was confident Democratic lawmakers would persuade "Reid and our commander in chief to keep the government from shutting down" by signing the House-passed bill.

EFFECTS OF SHUTDOWN WEIGHED

At the White House, a senior budget official said the impact of a shutdown "will be immediately felt on the economy."

It also would be felt unevenly, said Jeff Zients, deputy director of the Office of Management and Budget. Military troops would not receive their full paychecks, but Social Security recipients would still get monthly benefits, he said.

"National parks, national forests and the Smithsonian Institution would all be closed. The NIH Clinical Center will not take new patients, and no new clinical trials will start," he added in a roll call of expected agency closings.

But the air traffic control system would stay up and running, the emergency management agency would still respond to natural disasters and border security would not be affected.

There was no indication Reid planned to bring the House-passed stopgap bill to a vote, and he accused Republicans of blocking a deal by demanding anti-abortion provisions and a blockade on Environmental Protection Agency regulations on greenhouse gas and other pollutants.

"We don't have the time to fight over the tea party's extreme social agenda," he said.

It was unclear whether the day's maneuvering marked attempts by negotiators to gain final concessions before reaching agreement or represented a significant setback to efforts to avoid a shutdown. Either way, Boehner pointed out that the clash was only the first of many to follow as the new, conservative majority in the House pursues its goals of reducing the size and scope of government.

For all the tough talk, it did not appear the two sides were too far from a deal.

Officials in both parties said that in the past day or so, Democrats had tacitly agreed to slightly deeper spending cuts than they had been willing to embrace, at least $34.5 billion in reductions.

Agreement on that point was conditional on key details, but it was a higher total than the $33 billion that had been under consideration.

It also was less than the $40 billion Boehner floated earlier in the week -- a number that Republicans indicated was flexible.

There also were hints of Republican flexibility on a ban they were seeking to deny federal funds to Planned Parenthood. Officials said that in talks at the White House that stretched on after midnight on Wednesday, Republicans had suggested giving state officials discretion in deciding how to distribute family planning funds that now go directly from the federal government to organizations such as Planned Parenthood.

Stephens Washington Bureau Chief Steve Tetreault contributed to this report.