WASHINGTON - (AP) - Time growing short, President Barack Obama andcongressional leaders failed to reach agreement Thursday night on acompromise to cut spending and head off a midnight Fridaygovernment shutdown that no one claimed to want.

Obama, House Speaker John Boehner and Senate Majority LeaderHarry Reid all said the differences had been narrowed in a pair ofWhite House meetings during the day. They directed their aides towork through the night in pursuit of a deal.

"I expect an answer in the morning," Obama said in anappearance in the White House briefing room shortly after hissecond sit-down of the day with the lawmakers.

The comments capped a day in which the president, Reid, D-Nev.,and Boehner, R-Ohio, bargained and blustered by turns, strugglingto settle their differences over spending cuts and other issueswhile maneuvering to avoid any political blame if they failed.

With the economy just now beginning to create jobs in largenumbers, the president said a shutdown would damage the recovery.

"For us to go backwards because Washington couldn't get its acttogether is just unacceptable," he said. The White House announcedhe had postponed a scheduled trip to Indianapolis for the morning.

But agreement remained elusive, and Republicans passedlegislation through the House at mid-day to fund the Pentagon forsix months, cut $12 billion in domestic spending and keep thefederal bureaucracy humming for an additional week. "There isabsolutely no policy reason for the Senate to not follow the Housein taking these responsible steps to support our troops and to keepour government open," said Boehner.

Obama flashed a veto threat even before the bill passed on a247-181, mostly party-line vote. The administration issued astatement calling it "a distraction from the real work" ofagreeing on legislation to cover the six months left in the currentfiscal year, and there was no indication Reid would allow a vote onit.

As they left the White House after the evening meeting, Reid andBoehner issued a brief written statement that said they hadnarrowed their disagreements and said they would "continue to workthrough the night to attempt to resolve" the remaining ones.

Republicans want deeper spending cuts than the Democrats favorand also are pressing for provisions to cut off federal funds toPlanned Parenthood and stop the EPA from issuing numerousanti-pollution regulations.

"They're difficult issues. They're important to both sides andso I'm not yet prepared to express wild optimism," said thepresident.