Progress seen in budget talks, but no deal

By Carolyn Kaster, AP

House Majority Leader Eric Cantor, flanked by Rep. Duncan Hunter, left, discusses spending cuts Thursday.

EnlargeCloseBy Carolyn Kaster, AP

House Majority Leader Eric Cantor, flanked by Rep. Duncan Hunter, left, discusses spending cuts Thursday.

President Obama said after a meeting Thursday night at the White House with congressional leaders that they made some progress, but no deal was reached to avoid a shutdown.

If no agreement is reached today, the government would begin closing its doors Saturday, blocking masses of springtime tourists from many of the nation's best-known landmarks, delaying some tax refunds and sending some 800,000 federal workers home.

Obama twice summoned Senate Majority Leader Harry Reid and House Speaker John Boehner to the White House on Thursday, to continue working to break their impasse on a spending bill to keep government running beyond midnight today when the current budget authority expires.

Both sides vowed to keep trying. In a joint statement issued Thursday night after an Oval Office meeting with the president, Reid and Obama said they had "narrowed the issues" but had not reached agreement. They said they would work through the night "to attempt to resolve our remaining differences."

Obama told reporters at the White House that he wants to announce a final agreement early in the morning — but he added that nothing is certain, and "I'm not yet prepared to express wild optimism."

Earlier in the day, Reid said the two sides were close to how much to cut spending to lower the federal deficit, projected to hit $1.6 trillion this year. He said Republican support for measures to restrict abortions and limit the Environment Protection Agency's reach remained significant obstacles.

Boehner said divisions went deeper, including over how much to slash spending. "There are a number of issues that are on the table, and any attempt to try to narrow this down to one or two just would not be accurate," he said.

Q & A: What could happen during a shutdownLOOKING BACK: Possible shutdown stirs comparisons to '95House Republicans passed a bill Thursday to keep the government running for another week and fund military operations through September. It would cut $12 billion. Senate Democrats immediately denounced the proposal, and Obama promised to veto it, calling it a distraction from negotiations.

Emotions ran high. Debate on the measure began with boos and loud applause from a full House chamber, as if they were filling rival bleachers on either side of a high school basketball court.

When Democratic House Whip Steny Hoyer of Maryland asked for a "clean" bill, free of policy provisions, to fund the government for a week while both sides worked out a deal, House Majority Leader Eric Cantor rejected it.

"We don't accept the status quo," Cantor said to applause from fellow Republicans. "America is broke."

Obama previously has signed two temporary spending bills with a total of $10 billion in cuts as congressional leaders worked to end the budget standoff. Republicans have sought deeper reductions, totaling as much as $40 billion for the next six months, as well as measures that would limit the EPA's ability to regulate greenhouses-gas emissions from power plants and a proposal, pushed by Rep. Mike Pence, R-Ind., to ban the use of federal funds by Planned Parenthood, which provides medical care, contraception and abortions at 800 clinics.

Planned Parenthood officials note they cannot use tax money for abortions under federal law, and the group's president, Cecile Richards, denounced what she called "a small group of extremists" holding "the government hostage to their narrow political agenda."

But the measure's supporters said no federal money should underwrite a group that provides abortions.

"It seems like liberals in the Senate would rather shut the government down so they can continue to borrow money from China to support the biggest abortion provider in America," Pence said Thursday.

Even as talks continued, Obama administration officials began ramping up shutdown plans and warned it would shutter national parks, slow the tax refund checks for the 30% of filers who submit their returns by mail and stop the processing of small-business loans.

"The impact on the economy, even for a short period of time, could be relatively significant," said Office of Management and Budget Deputy Director Jeffrey Zients.

Employees needed to protect the safety of life and property would continue work, including FBI agents, air-traffic controllers and Transportation Security Administration workers, who screen airline passengers. Obama and members of Congress still would work and get paid during a shutdown because their salaries are not subject to the annual appropriations process. The president earns $400,000 annually. Rank-and-file congressional members get $174,000, while top leaders earn more.

"It's very frustrating to be caught in the middle of this political theater," said John Gage, president of the American Federation of Government Employees, which represents nearly 600,000 federal workers. "They have families and mortgages and bills to pay. Missing a paycheck is a tough thing."

Contributing: David Jackson

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