Updated: 10:49 p.m.
Speaker John Boehner (R-Ohio) and Senate Majority Leader Harry Reid (D-Nev.) emerged from their second meeting Thursday with President Barack Obama without an agreement to avert a government shutdown.
Obama told reporters after the meeting that progress had been made but that work remains on negotiating a spending measure to cover the rest of the fiscal year, which ends Sept. 30. Stopgap funding for the government runs out Friday night, and many federal services will grind to a halt without a deal.
“What I’ve said to the Speaker and what I’ve said to Harry Reid is because the machinery of the shutdown is necessarily starting to move, I expect an answer in the morning. And my hope is, is that I’ll be able to announce to the American people sometime relatively early in the day that a shutdown has been averted,” Obama said at the news conference. The president postponed a trip to Indianapolis that he had scheduled for Friday, the White House announced late Thursday, but another planned trip to Williamsburg, Va., was still possible.
How realistic that deadline is remains to be seen. Boehner has been adamant that any agreement should be able to garner the 218 GOP votes to pass it, and he won’t cut a deal with Reid and Obama until he has vetted it with his members. The earliest he could do so is at a planned Conference meeting at noon Friday.
In a terse joint statement, the two Congressional leaders said: “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.”
In his remarks, Obama acknowledged that the meeting was productive.
“We made some progress today. Those differences have been narrowed. And so once again the staff is going to be working tonight, around the clock, in order to see if we can finally close the deal,” he said.
“But there is still a few issues that are outstanding. They’re difficult issues. They’re important to both sides. And so I’m not yet prepared to express wild optimism,” he added.
Speaking on the Senate floor after the meeting, Reid said he was “not very hopeful” but was “optimistic.”
Obama also stressed the economic stakes in the negotiations and warned that a shutdown could hurt the recovery.
“For us to go backwards because Washington couldn’t get its act together is unacceptable,” he said.
With just more than 24 hours before a government shutdown, the two sides remained divided on a handful of issues, including the overall size of reductions to federal spending, where those cuts will come from and GOP demands to include a host of controversial policy riders.
The two sides are fairly close in terms of the overall level of cuts, with negotiations reportedly centering on reductions between $35 billion and $40 billion. But the two sides are sharply divided over where to make the cuts. While the GOP insists on making cuts to discretionary domestic spending, Democrats have pushed for reductions to mandatory spending accounts.
Where the cuts come from is significant for Democrats and Republicans alike. By reducing the size of the budget for the remaining year, Congress will reduce the baseline number for spending in future budget battles, and Republicans would like to push that number as low as possible for discretionary spending.
But with Republicans expected to demand additional cuts to discretionary accounts in upcoming budgets, Democrats are doing everything they can to keep their levels as high as possible for the remaining year.
As for the politically thorny issue of policy riders, both sides have dug in sharply over the past several days. Boehner and other top Republicans have insisted on including a host of riders in the final deal, such as restrictions on the Environmental Protection Agency’s regulation of greenhouse gases and federal funding for Planned Parenthood. But Democrats have made those provisions the centerpiece of their attacks on the GOP over the past several days, and Reid could find it difficult to cede that political territory to Republicans.