Assistant Senate Majority Leader Dick Durbin (D-Ill.) warned on Thursday that, if congressional leaders allow the government to shut down Friday night, it would be an “unmitigated disaster” for the country.

“That [a shutdown] could happen tomorrow night at midnight,” Durbin said. “If it does, it is an unmitigated disaster. There is no winner. No political party can claim they came out ahead in this exercise. It makes us all look bad. And deservedly so. “

Congressional leaders worked through the night in an attempt to reach a budget agreement for 2011 before current funding for the federal government runs dry on Friday night.

"We are now in the countdown phase as to whether the government of the United States, the most prosperous nation in the world, is going to shut down, turn off the lights, close its door and walk away,” said Durbin.

The House just before noon approved a rule allowing for House consideration of a bill that would fund the federal government for another week, through April 15.

The rule was approved in a party-line vote, 228-189, in which all Republicans voted for it and all Democrats voted against. That reflects Democratic opposition to the underlying bill, which they say unfairly cuts from discretionary programs, but not from the Defense Department.

With the rule approved, the House began debating the bill, H.R. 1363, and was expected to approve it later Thursday.

House Speaker John Boenher (R-Ohio) said on the House floor Thursday morning that there is no deal yet on budget numbers for FY 2011, even as he was preparing to resume talks at the White House at 1 p.m.

"Talks to resolve last year's budget are progressing, but there is no agreement yet," he said shortly after 11 a.m. "No agreement on numbers, and no agreement on the underlying policies that were passed by this chamber."

Senate Majority Leader Harry Reid (D-Nev.) said Thursday morning he is less optimistic that a government shutdown can be averted. 

“I am not nearly as optimistic as I was 11 hours ago,” said Reid, referring to a Wednesday night White House meeting with House Speaker John Boehner (R-Ohio) and President Obama. “And that’s an understatement. The differences are no longer over how much we save in government spending. The only thing holding us back now is ideology.”

“At that time I was cautiously optimistic that we could complete work on the people’s business to fund the government,” continued Reid. “We are 38 hours away on the deadline of the government shutting down — the decision must be made on whether or not the government shutters or stays open.” 

Reid’s statement signifies a shift, as both sides indicated Wednesday night they were hopeful the shutdown could be averted.

"There is no reason why we should not be able to complete a deal," said Obama said in a brief appearance at the White House.

Republicans accused the White House of a "lack of leadership"; Democrats said "take-no-prisoner" Tea Partiers are holding up a deal.

The House starts legislative business at 10 a.m. Thursday, and has plenty to get to.

The House plans to consider H.R. 1363, a one-week stopgap spending bill, barring a breakthrough at Wednesday night's meeting between congressional leaders.

Members also plan on final passage of H.R. 910, which would restrict the Environmental Protection Agency's ability to regulate greenhouse gas emissions.

Finally, the House might also take up a resolution disapproving of the Federal Communications Commission's net-neutrality rule.

The House Rules Committee on Wednesday night approved a rule allowing for one hour of debate on H.R. 1363, a one-week stopgap spending measure that Democrats oppose because it cuts $12 billion in just one week.

The bill would keep the federal government funded through April 15. Current funding expires on Friday.

The rule for the bill prohibits amendments, but does give Democrats the chance to make one motion to recommit. Democrats today tried to make six amendments in order, but these were voted down in committee.

The Senate appears close to moving forward with a bill reauthorizing two programs in the Small Business Administration (SBA) after moving through a number of amendments on Wednesday.

Here’s a look at the votes on all of Wednesday’s amendments. All needed 60 votes to clear through Senate rules.

The House on Wednesday night rejected all but one Democratic amendment to a bill that would prevent the Environmental Protection Agency (EPA) from regulating greenhouse gas emissions. After the votes, the House moved to special-order speeches, leaving a vote on final passage of the Energy Tax Prevention Act (H.R. 910) until later in the week.

House Republicans accepted just one amendment, from Rep. Jerry McNerney (D-Calif.), that would specify that voluntary programs to address climate change are not prohibited by the bill. But they rejected all other Democratic amendments, including those that would require studies of the impact of the bill.

One of the more controversial amendments was offered by Rep. Henry Waxman (D-Calif.), who proposed language saying Congress accepts the EPA's findings that climate change is happening and is caused by human activities. Democrats argued that Republicans are trying to deny the existence of climate change, while Republicans countered that this issue is irrelevant to the bill, and rejected it along with all the others.