President Barack Obama and congressional leaders have only hours to avert a midnight government shutdown that they say would inconvenience millions of people and damage a still fragile economy. 

President Obama and congressional leaders say another late night of talks Thursday had narrowed the differences over how to cut federal spending but there was no agreement.

President Obama hoped to announce a deal Friday, but wasn't optimistic.

Aides are trying to agree on how much federal spending to slash, where to cut it and what caveats to attach as part of a bill to fund the government through September 30th. A temporary federal spending measure expires at midnightand President Obama threatened to veto another budget extension offered by the GOP.

A closure would mean the furloughs of hundreds of thousands of workers and the services they provide, including processing many tax refunds and military pay.

(AP) contributed to this story.