Obama, Congressional Leaders Narrow Differences, Still No Agreement

After a tense meeting at the White House, President Barack Obama and congressional leaders say there has been a narrowing of differences about budget and spending issues that threaten a partial shutdown of the federal government.

The late night meeting with House Speaker John Boehner and Senate Majority Leader Harry Reid - attended by Vice President Joe Biden - came after the president returned from a day of travel to Pennsylvania and New York City.

Failure to achieve a compromise between the Republican-controlled House of Representatives, the Democratic-controlled Senate and the White House on reducing spending in the current fiscal year could trigger a federal government shutdown by Friday.

The president came to the White House briefing room to say the talks were, in his words, frank and constructive and that he remains confident a deal can be reached.

"There are ramifications all across this economy. And, at a time when the economy is still coming out of an extraordinarily deep recession, it would be inexcusable given the relatively narrow differences when it comes to numbers between the two parties, that we can't get this done," he said.

But it was clear from Obama's remarks that more needs to be done for an agreement that would avert a government shutdown.

Reid told reporters the talks narrowed the issues "significantly" but his statement, along with Boehner's, made clear they are still some way from an agreement.

"I have confidence we can get this done. We are not there yet, but hope lies eternal," said Reid.

"We did have a productive conversation this evening," said Boehner. "We do have some honest differences, but I do think we made some progress."

Reid and Boehner said their staffs would work through the night, with Boehner repeating what he had said earlier in the day, that no one wants a government shutdown.

President Obama said he would check back with Reid and Boehner's staffs, adding that if no progress was made, he would call for yet another round of face-to-face talks.

Earlier, Reid had assailed Republicans saying they had repeatedly changed their negotiating positions and criticized a decision by Speaker Boehner to bring to a vote another short-term spending bill to keep the government operating only for one week.

President Obama opposes additional short term measures to keep the government running.

Speaking in Pennsylvania on Wednesday, Obama warned that a government shutdown would create more uncertainty for the economy.

"I do not want to see Washington politics stand in the way of America's progress. At a time when you're struggling to pay your bills and meet your responsibilities, the least we can do is to meet our responsibilities to produce a budget," added Obama. "That's not too much to ask for."

President Obama has said he wants Congress to agree on a level of cuts that would keep the government operating through the rest of the fiscal year and not harm important programs.

Republican budget cut proposals include provisions that would eliminate government funding for programs such as Planned Parenthood, reduce authority of the Environmental Protection Agency to regulate greenhouse gases and cut funding for public broadcasting.

A partial government shutdown would affect some 800,000 workers not deemed as "essential", and cause delayed military pay, slowed income tax processing and refunds, among other things.