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Thursday, April 7, 2011

Obama, Congress struggle to find budget deal, Posted by Meosha Eaton

* Obama says aides will work through night to get deal

* Boehner, Reid say differences have narrowed

* Fourth White House meeting in three days

* Midnight Friday deadline looms
* (Updates after Obama, Reid, Boehner talks)

By Richard Cowan and Patricia Zengerle

WASHINGTON, April 7 (Reuters) - President Barack Obama and congressional leaders failed to reach a deal but narrowed their differences on Thursday in a bitter budget dispute that could lead to a government shutdown.

Obama said negotiators would work all night and he expects an answer on Friday morning on whether it is possible to avoid a government closure at midnight on Friday that would idle hundreds of thousands of workers and potentially put a crimp on the U.S. economic recovery.

He met for an hour with Senate Democratic leader Harry Reid and the top Republican in the U.S. House of Representatives, Speaker John Boehner at the White House. It was their fourth meeting in three days.

"I'm not prepared to express wild optimism," Obama told reporters after the nighttime meeting, the second night in a row he has made an evening foray into the White House briefing room to talk about the difficult search for a budget deal.

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," Reid and Boehner said in a joint statement.

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 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.

Their deadline to avoid a shutdown: Midnight on Friday night. Some cable television news broadcasts included a shutdown clock ticking the time down. (Additional reporting by Kim Dixon, Donna Smith, David Alexander, Andy Sullivan, Thomas Ferraro and David Morgan; Writing by Steve Holland; Editing by Vicki Allen and Deborah Charles)

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