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US gov't shutdown looms as Republicans and Democrats fail to agree

Reuters/Jim Young

A second consecutive late-night summit between US President Barack Obama and the Republican House of Representatives speaker John Boehner has failed to clinch a deal in a budget row to avert a government shut down. An agreement is needed with the new Republican house elected in November to clear a federal 2011 budget to fund the government through until 1 October this year. 

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Failure to agree a deal by a Friday deadline will mean the temporary lay-off of some 800,000 federal employees and frontline combat soliders, including those in Iraq and Afghanistan, will miss paychecks,

National parks, monuments and passport offices will also close and even the Blackberry smartphones of government officials will no longer function.

Both Democrats and Republicans agree on the need for massive spending cuts although they differ on the size. Boehner has denied Democrat claims that the two sides had settled on $34.5 billion in cuts.

The White House has refused to give details of the outstanding issues, but Obama has said he will not back down on Republican attempts to curtail spending on education, environmental rules and some medical procedures.

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