US President Barack Obama has failed to break a budget impasse with Republicans, though he expressed confidence that the two sides would hammer out a deal to avert a government shutdown.
Obama, who held late-night budget talks yesterday with the leaders of Congress, said that the discussions have helped matters but there was no deal yet to cut spending.
Obama and the Congressional leaders John Boehner, Speaker, House of Representatives and Senator Harry Reid, following a White House meeting exuded confidence that the government shutdown, the first one in more than a decade, could still be avoided.
"I remain confident that if we're serious about getting something done, we should be able to complete a deal and get it passed and avert a shutdown. But it's going to require a sufficient sense of urgency from all parties involved. It means that people have to recognise that a government shutdown has real consequences for real people," Obama told reporters immediately after the meeting that lasted nearly two hours.
The White House and the Congress needs to reach an agreement by midnight tomorrow, when the current spending authorisation measure expires, in the absence of which parts of the government will close down.
The Republican-majority House has passed a bill that included $61 billion in cuts from current spending levels.
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This has been rejected by Democrat-controlled Senate.
Two previous extensions of the government spending resolution have included $10 billion in cuts. An estimated 800,000 government workers will likely be asked to stay home, if there is a shutdown.
"We did have a productive conversation this evening. We do have some honest differences, but I do think we made some progress," Boehner said.
"But I want to reiterate, there's no agreement on a number and there's no agreement on the policy questions. But there's an intent on both sides to continue to work together to try to resolve this," he said.
"No one wants the government to shut down. And we're going to continue to work throughout the night and tomorrow," Boehner said.
Reid said the meeting narrowed the issues significantly.
"We are going to continue working. Our staffs are going to work through the night. The Speaker and I will get back together tomorrow morning and see how they did and continue. I have confidence that we can get this done. We're not there yet, but hope lies eternal," Reid said.