Washington (CNN) -- House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nevada, announced Thursday afternoon that negotiators had not yet been able to reach an agreement on a federal budget covering the remainder of the current fiscal year.
The two men made the announcement after emerging from a round of talks at the White House with President Barack Obama. They said they expected to resume talks later Thursday afternoon and would return to the White House for additional discussions at 7 p.m. ET.
If Congress and the White House cannot reach an agreement by midnight Friday, when the current spending authorization measure expires, parts of the government will close down.
Shortly before Reid and Boehner addressed reporters, the GOP-controlled House of Representatives passed a short-term government spending bill that would delay the impending shutdown by one additional week.
The measure, which passed 247-181 in a largely party-line vote, funds the Pentagon for the remainder of the current fiscal year. It would also slash federal spending, however, by another $12 billion and is strongly opposed by Democrats in both Congress and the White House because of the programs for which funding would be cut.
Reid declared the bill a "nonstarter" before it cleared the House. The White House promised a veto if it reaches Obama's desk.
The president "does not believe that we should sign another short-term measure that carries within it a lot of policy implications in order to kick this can down the road," White House press secretary Jay Carney said. "It is simply no way to do business."
Top legislators on both sides of the aisle seemed increasingly resigned to the prospect of a shutdown as the day dragged on. In a last-minute attempt to avert one -- which would result in roughly 800,000 federal workers being sent home and temporarily stop a number of government services -- Obama spent much of the afternoon huddled behind closed doors with Reid and Boehner.
Congressional staffers began receiving their furlough notices earlier in the day. Employees deemed "essential" during a shutdown would still be able to work; those considered "nonessential" would not.
"It looks like it's headed" toward a shutdown, Reid said on the Senate floor. "The numbers are basically there, but I am not as nearly as optimistic -- and that's an understatement -- as I was" after meeting with Obama and Boehner on Wednesday night.
Reid said the differences between the two parties "are no longer on how much savings we will get on government spending." Instead, he insisted, the major obstacle at this point is Republicans' insistence on including provisions related to abortion and environmental protection.
Republicans are, among other things, pushing to strip all funding from Planned Parenthood as well as trying to prevent the Environmental Protection Agency from regulating greenhouse gas emissions.
"The only thing holding up an agreement is ideology," he said.
Boehner disagreed with Reid's assessment of the numbers, declaring that there is "no agreement on numbers and no agreement on the underlying policies."
The speaker also insisted that "there is absolutely no policy reason for the Senate not to follow the House in taking these responsible steps to support our troops and keep the government open."
Republican leaders are "confident that those Democrats who believe it is important to fund our troops and make real spending cuts will prevail upon Sen. Reid and our commander in chief to keep the government from shutting down," he said.
Reid replied that he was starting to question whether Boehner really wants a deal.
A Democratic source told CNN on Thursday morning that there had been a tentative agreement to cut $34.5 billion in spending for the rest of the fiscal year, which ends September 30. Republican sources, however, said that was incorrect and insisted that no number had been agreed to.
Earlier this year, the House passed a bill that included $61 billion in cuts from current spending levels, but the measure was rejected by the Democratic-controlled Senate. Two previous extensions of the government spending resolution have included $10 billion in cuts.
Republicans, under pressure from the conservative Tea Party movement to make deep cuts that would reduce the size of government, blame Democrats for failing to pass a fiscal year 2011 budget last year when they controlled both congressional chambers.
They also have said that Obama and his party are ignoring the peril of the rising federal deficits and national debt.
Democrats contend the $61 billion in spending cuts in the House bill would harm the economic recovery and slash education and innovation programs essential for continued growth.
Obama and Reid both insist that Democrats have agreed to more than 50% of the spending cuts sought by Republicans, which they said should be sufficient for a compromise on an issue that has little overall effect on the deficit and debt issues.
The budget brinkmanship shows the political stakes of the situation, with both parties trying to depict the other as unwilling to do what's right for the country.
A senior Democratic source with knowledge of the ongoing negotiations said the one of biggest obstacles to a deal involves whether reductions in mandatory spending programs, known in appropriations parlance as "changes in mandatory spending" or CHIMPS, should be part of spending cuts.
Examples of mandatory spending programs include Pell Grants, the Children's Health Insurance Program and some types of highway funding. Such programs are funded for multiple years at a time, with the spending set for the time period covered, exempt from congressional authorization each year.
Democratic sources have said they want about half the overall cuts in this spending bill to come from mandatory spending programs, and they have proposed the necessary reductions in programs at the U.S. Department of Agriculture, the Justice Department and the Treasury Department, and in Pell Grants.
Republicans note that reducing the spending in a mandatory program for one year doesn't prevent the amount from returning to its original level the following year.
In response to the looming budget deadline, the U.S. Office of Personnel Management has posted information on its website how a shutdown would affect federal employees. The posting says most federal workers paid with funds appropriated by Congress would go on temporary furlough in the event of a shutdown.
It would be up to Congress to decide if furloughed workers get paid for the time missed when the shutdown ends, the posting said. Health benefits continue if the shutdown lasts for less than a year, it said.
If there is a shutdown, the Internal Revenue Service will stop processing paper tax returns, the Small Business Administration will stop making loans and federal home loan guarantees will be put on hold, among other things.
U.S. troops would be paid through Friday, but after then, paychecks to members of the military, including those in war zones, would stop. The National Institutes of Health would stop accepting new patients and would put clinical trials on hold.
A Justice Department representative said Wednesday on condition of not being identified said that "critical national security, law enforcement and prison operations" would continue in the event of a shutdown.
"All FBI personnel in the field will continue to work, and the department will be ready to respond to any and all contingencies that might arise during this time," the Justice representative said. However, some functions including civil litigation, outreach to crime victims and grant processing would be stopped or curtailed, the representative said.
CNN's Dana Bash, Deirdre Walsh, Ted Barrett, Kate Bolduan, Terry Frieden and Dan Lothian contributed to this report.
Source: http://rss.cnn.com/~r/rss/cnn_allpolitics/~3/gSs3NAk2nYI/index.html
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