Senate Majority Leader Harry Reid said Democrats and Republicans in Congress have essentially agreed on spending levels for the rest of the year, but a budget deal is being held up by a split over policy measures related to Planned Parenthood funding and clean-air regulation.
Reid said the divisions made him more pessimistic about the chances of passing a compromise deal before a Friday deadline, resulting in a government shutdown.
"It looks like it's heading in that direction," Reid said in remarks on the floor Thursday morning.
House Speaker John Boehner, speaking with reporters later, said no agreement had been reached. He denied that the so-called "riders" were driving the stalemate — saying he was committed to fighting for the most spending cuts possible.
"All of these policy issues continue to be on the table," he said.
The remarks came the morning after Reid, Boehner and President Obama met for nearly two hours at the White House to hammer out a deal. Their representatives continued to meet for another three hours into Thursday morning.
Agreement was forming around a $34.5-billion package of cuts, according to sources familiar with the talks. That would be an increase over the amount previously discussed.
The new package would include $3 billion in Pentagon cuts, the sources said, which would make the level of reductions more agreeable to Democrats.
"The numbers are basically there, that's where we are," but other more contentious matters remained unsettled, he said.
Boehner said no spending level had been agreed to. GOP aides said there was no agreement to cut Defense Department funds.
The parties will meet again at the White House on Thursday afternoon, 35 hours before government funding runs dry.
House Republicans continued to push for policy measures attached to their initial spending plan, Reid said. Those include a proposal related to funding for abortion and a measure that would block the federal government from regulating greenhouse gasses.
Five separate abortion provisions are being pursued by the GOP, including one that would prevent federal funding for Planned Parenthood and another would turn the federal Title X family-planning program into a state block grant program, which would allow governors more control over how the money is spent, according to sources familiar with the talks.
Other family-planning-related provisions would halt foreign aid to health organizations that promote or provide abortion services, the so-called Mexico City rule, as well as to the U.N. Population Fund, which provides reproductive, AIDS-prevention and women's health services, sources said. Another would ban the District of Columbia from sending local tax revenues to groups that provide access to abortions.
Most of those provisions were included in the House-passed spending bill.
The House also is pressing for several provisions related to the Environmental Protection Agency's ability to regulate greenhouse gases and other pollutants that were part of the original House bill. That bill was approved in February on a party-line vote.
Abortion-rights activists were protesting Thursday outside the Capitol.
"These matters have no place in a budget bill," Reid said. "We should not be distracted by ideology — this is a bill that funds that government."
Wednesday night, Reid and Boehner had appeared together outside the White House and described incremental progress in negotiations. If an agreement is not passed by Friday at midnight, the federal government will begin a closing some services and suspending pay to workers.
"We can't solve in one night a disagreement this country's been fighting for four decades," Reid said of the abortion provision. "It's not realistic; it's not fair to the American people."
The House will vote Thursday afternoon on a one-week continuing resolution that would keep the government running, and also fund the Department of Defense through December.
"There's no policy reason for the Senate to oppose this bill," Boehner said.
But the White House has threatened to veto the measure, which makes $12-billion in new spending reductions, and Democrats who control the Senate are unlikely to even consider it.