A budget impasse is looming in the United States where lawmakers have been unable to reach a deal on spending cuts and a federal budget.
Democrats and Republicans are at odds over the details of some cuts.
Senator Harry Reid (D) said both sides had agreed to $US38 billion in cuts but were unable to agree on federal funding for abortion.
But House Speaker John Boehner (R) said the main issue was the level of cuts and an agreement depended on the administration making bigger cuts in spending.
He said on Friday afternoon that he was hopeful an agreement could be reached, but that the Republicans were not going to "roll over".
The White House said President Barack Obama spoke separately to Mr Boehner and Senator Reid on Friday morning.
The dispute is over funding for the remainder of the current fiscal year, which ends on 30 September.
Without a new budget, the government will shut down at midnight on Friday.
The BBC reports that a law passed in 1870 prohibits the federal government from operating if a budget has not been passed.
The government has subsisted without a long-term budget since 1 October. It has been funded by a series of temporary measures.
The most recent of these is set to expire at midnight on Friday.
Republicans in the House approved a temporary measure on Thursday, which would cut $US12 billion from spending in a single week.
However, President Obama said in a statement that the government could not continue to operate on a week-to-week basis and that he would veto the bill.
Previous shutdowns
The federal government shut down 10 times during the Carter and Reagan administrations.
The last shutdown was in 1995 under President Bill Clinton. It lasted 20 days.
