With Obama already embarked on his 2012 reelection bid, it is unclear who has most to lose from a prolonged government gridlock. –Photo by AP

WASHINGTON: Intense last-minute wrangling gripped Washington Friday, with the US government mere hours from shutting down as a dramatic budget standoff threatened to provoke a far reaching political crisis.

Newly empowered Republican leaders and President Barack Obama’s Democrats sought to find a way out of entrenched political positions before the sprawling US bureaucracy effectively runs out of money at a midnight.

Despite rising hopes of a stop gap deal to avert a shutdown, Republican leaders, facing a fiercely conservative caucus demanding huge spending cuts, said that there was “no deal” just over three hours before the deadline.

With time fast running out, the key Republican power player — House of Representatives Speaker John Boehner — called Obama to discuss latest developments, but neither side gave details on the call.

If last-minute negotiations fail, the US government would be plunged into its first shutdown caused by a funding row since 1995, when Bill Clinton outmaneuvered his Republican foes and rescued a sagging presidency.

With US politics more polarized than ever, and Obama already embarked on his 2012 reelection bid, it is unclear who has most to lose from a prolonged government gridlock, a factor possibly giving each side pause late Friday.

Boehner is in the tough position of keeping a restive coalition — whipped up by the ultraconservative Tea Party in line, and a political imperative of not alienating crucial independent and moderate voters.

A shutdown would see around 800,000 federal employees temporarily laid off, paychecks for frontline combat soldiers delayed and national parks and monuments closed.

But operations vital to national security like the war in Afghanistan and border services would go on as normal.

Senior Republican leaders were involved in a late night meeting with three hours to go before the deadline, and White House officials were said to be examining parameters of a deal to fund the government through October 1.

A meeting of the Republican House caucus was set for 9:45 pm local time.

Given the late hour, there would be little time for the House and Senate to sign off on a deal even if one was struck.

The two sides would likely have to put together a temporary funding bill for a few days or weeks to keep the money flowing to the government pending further maneuverings and long-term approval of a package on Capitol Hill.

Obama would then have to sign it in the nick of time before midnight.

Boehner earlier charged that a deal was foundering because Democrats were balking at cuts in government programs demanded by House Republicans elected in a mid-term election rout in November.

“We’re not going to roll over and sell out the American people like it’s been done time and time again here in Washington,” Boehner said.

“When we say we’re serious about cutting spending, we’re damn serious about it.”

Boehner appeared caught between his fervently conservative members, many of whom were elected in November on a platform of massive spending cuts, and more moderate voters keen to see a deal.

Harry Reid, who leads the Democratic controlled Senate, said that the two sides had agreed on 38 billion dollars in cuts and accused Republicans of trying to curtail women’s health programs to appease social conservatives opposed to abortion.

“As a legislator, I’m frustrated. And as an American, I’m appalled,” he said, as Democrats, like Republicans played to their core political supporters in a possible sign of covering themselves for a future compromise.

Obama canceled a planned trip to Indiana on Friday to stay in Washington and see the final push to the end. He also called off a weekend away with his family in the historic Virginia City of Williamsburg.