After a night-time round of tense White House talks, Mr Obama said negotiators would work all night and he expects an answer this morning on whether it is possible to avoid a government closure at midnight.
'There are still a few issues that are outstanding. They're difficult issues. They're important to both sides and so I'm not prepared to express wild optimism, but I think we are further along today than we were yesterday,' Mr Obama said.
Should last-ditch efforts fail, around 800,000 federal employees would be temporarily laid off, frontline combat soldiers would miss pay checks and government officials would go dark tomorrow.
Mr Obama noted the 'tremendous impact' a shutdown could have on millions of Americans and on the economic recovery and said he had confidence negotiators could make progress overnight.
'My hope is ... that I'll be able to announce to the American people sometime relatively early in the day that a shutdown has been averted, that a deal has been completed,' said Mr Obama.
The investment firm Goldman Sachs estimated a government shutdown lasting more than a week could cost the economy $8bn in missed federal spending.
With time running out, Mr Obama met for an hour with Senate Democratic leader Harry Reid and the top Republican in the US House of Representatives, Speaker John Boehner.
It was their fourth White House meeting in three days.
Democrats blamed the impasse on a Republican push for policy provisions that would block public funding of birth control and stymie environmental protection efforts.
But Mr Boehner said the divisions did not stop there.
'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.
Neither side seemed willing as yet to make the final compromise necessary for an agreement.
'We have narrowed the issues, however, we have not yet reached an agreement. We will continue to work through the night to attempt to resolve our remaining differences,' Mr Reid and Mr Boehner said in a joint written statement.
The two sides did not seem far apart in their negotiations in terms of dollars, only several billion dollars out of a budget of about $3.7 trillion.
A Democratic congressional aide said a final deal on total spending cuts for the remainder of this fiscal year would probably end up closer to $33bn than the Republicans' $40bn target, although a Republican aide said their side was still pushing for closer to $40bn.
- Keywords:
- us budget,
- barack obama,
- harry reid,
- john boehner
