WASHINGTON – The federal government lurched toward a shutdown for the first time in 15 years Friday night as President Barack Obama and congressional leaders groped for a last-minute compromise to cut tens of billions in federal spending and end the impasse.

Republicans placed the House on standby for a late-night vote in case a decision was made to pass a stopgap bill to keep the government running for a few days to allow more time for negotiations.

The administration readied hundreds of thousands of furlough notices for federal workers and warned that federal services from national parks to tax-season help centers would be shuttered without a deal by midnight.

"We know the whole world is watching us today," said Senate Majority Leader Harry Reid, D-Nevada, during a day that featured incendiary, campaign style rhetoric as well as intense negotiation.

Into the night, the two sides were still swapping proposals from opposite wings of the Capitol and President Barack Obama was on the phone from the White House with House Speaker John Boehner, R-Ohio.

In a Capitol short on news but long on rumors, House Republican leaders circulated an early evening update to the rank and file: "We'd like to clear up some confusion and relay there has not yet been a deal reached, the negotiations are ongoing."

"I was born with a glass half full," Boehner told reporters, indicating optimism about a deal. Reid, Obama and Boehner all agreed a shutdown posed risks to an economy still recovering from the worst recession in decades.

But there were disagreements aplenty among the principal players in an early test of divided government - Obama in the White House, fellow Democrats in control in the Senate and a new, tea party-flavored Republican majority in the House.

"Republican leaders in the House have only a few hours left to look in the mirror, snap out of it and realize how positively shameful that would be," Reid said at one point, accusing Republicans of risking a shutdown to pursue a radical social agenda.

Hours later, officials said the talks centered on spending cuts in the range of $38 billion to $40 billion. But they stressed there was no accord on either an overall total or the composition of the reductions.

Republicans and Democrats alike said the GOP appeared to be jettisoning a demand to block numerous Environmental Protection Agency regulations on polluters. A federal study of the likely economic impact of the agency's rules was one possible alternative under discussion, they added.

A Republican demand to make changes in a federal program that provides family planning services and women's health care met withering criticism from Democrats. Unexpectedly, several conservative Republican senators urged their counterparts in the House not to shut the government down over the issue.

For much of the day, Reid and Boehner disagreed about what the disagreement was about.

Reid said there had been an agreement at a White House meeting Thursday night to cut spending by about $38 billion as part of a bill to finance the government through the Sept 30 end of the budget year.

He said Republicans also were demanding unspecified cuts in health services for lower income women that were unacceptable to Democrats.

"Republicans want to shut down our nation's government because they want to make it harder to get cancer screenings," he said. "They want to throw women under the bus."

Boehner said repeatedly that wasn't the case - it was spending cuts that divided two sides.

"Most of the policy issues have been dealt with, and the big fight is about spending," he said. "When will the White House and when will Senate Democrats get serious about cutting federal spending."

By midday Friday, 12 hours before the funding would run out, most federal employees had been told whether they had been deemed essential or would be temporarily laid off in the event of a shutdown.

The military, mail carriers, air traffic controllers and border security guards would still be expected at work, although paychecks could be delayed.

National parks and forests would close, and taxpayers filing paper returns would not receive refunds during a shutdown.

Passports would be available in cases of emergencies only.

Obama canceled a scheduled Friday trip to Indianapolis - and a weekend family visit to Colonial Williamsburg in Virginia - and kept in touch with both Boehner and Reid.

Senate Republican Leader Mitch McConnell of Kentucky sounded hopeful, predicting an agreement and saying, "I assure you, these are not unresolvable issues."

The House passed legislation on Thursday to keep the government running for another week while also cutting $12 billion in spending - and providing enough money for the Pentagon to operate through Sept 30.

Boehner urged Obama to reconsider a veto threat.

That seemed unlikely, although Republicans and Democrats alike talked of trying once more to pass a stopgap bill if the larger agreement remained elusive.

Obama has already signed two of those interim bills, which included a total of $10 billion in spending cuts.

The standoff began several weeks ago, when the new Republican majority in the House passed legislation to cut $61 billion from federal spending and place numerous curbs on the government.

In the weeks since, the two sides have alternately negotiated and taken time out to pass interim measures.

Democrats said Republicans had effectively jettisoned numerous demands to block Environmental Protection Agency regulations aimed at polluters, a key stumbling block in negotiations for weeks.

Originally, Republicans wanted to ban federal funds for Planned Parenthood, a health care services provider that is also the nation's largest provider of abortions.

Federal funds may not be used to pay for abortions except in strictly regulated cases, but supporters of the ban said cutting off government funds for the organization - currently about $330 million a year - would make it harder for it to use its own money for the same purpose.

Democrats rejected the proposal in private talks. Officials in both parties said Republicans returned earlier in the week with a proposal to distribute federal funds for family planning and related health services to the states, rather than directly to Planned Parenthood and other organizations.

Democrats said they rejected that proposal, as well, and then refused to agree to allow a separate Senate vote on the issue as part of debate over any compromise bill.

Instead, they launched a sustained campaign at both ends of the Capitol to criticize Republicans.

"We'll not allow them to use women as pawns," said Senator Patty Murray, a fourth-term lawmaker from Washington who doubles as head of the Democratic senatorial campaign committee.

For Congress and Obama there are even tougher struggles still ahead - over a Republican budget that would remake entire federal programs, and a vote to raise the nation's debt limit.