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"We have narrowed the issues, however, we have not yet reached an agreement," Democratic Senate Majority Leader Harry Reid and Republican House Speaker John Boehner said in a joint statement after negotiations broke up.
"We will continue to work through the night to attempt to resolve our remaining differences," they said.
Lawmakers and the White House have been groping towards a deal on funding the government to October 1, mindful of a partial shutdown triggered when a stopgap spending measure expires at midnight Friday.