Congressional leaders failed to reach an agreement to fund the federal government late last night in a White House meeting with President Obama, increasing the possibility of a government shutdown. Emerging from the 90-minute meeting just before midnight with House Speaker John Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV), Obama said that while no final deal had been reached, both sides narrowed the differences between their positions. He added, “I remain confident that if we’re serious about getting something done, we should be able to complete a deal and get it passed and avert a shutdown.” But it’s unclear how serious all parties have been in these negotiations. Funding for the government runs out at midnight tomorrow, and Republicans have thus far been unwilling to make any meaningful concessions, setting up the possibility of the first shutdown in 15 years. In fact, many analysts believe that a shutdown is already inevitable, as a deal had to be reached Tuesday night in order to allow enough time for the bill to work its way through the House and Senate and be signed by the president.

MOVING THE GOAL POSTS: Congressional leaders have been negotiating over funding the government for months, but while Democrats have repeatedly ceded ground, Republicans have so far refused to budge. Last week, Senate Democrats and the White House agreed to a compromise that would cut $33 billion below current levels. Obama has consistently said that he’s willing to meet the GOP halfway, but with the $33 billion figures, Democrats went more than half the way to the GOP bill to fund the government for the rest of the year. In fact, the figure goes even further than the GOP’s original version of the funding bill, which would have cut only $32 billion. GOP leaders quickly withdrew that proposal after it was introduced in February under intense pressure from Tea Party activists and conservative Republicans in Congress. Their newer proposal would cut $61 billion. Noting that Democrats had already agreed to “the Republicans’ original proposal,” Reid said last night, “I guess they were for it before they were against it. But now they’re moving the goal post again .” Meanwhile, Republicans are insisting on using this crisis to advance their unrelated political agenda by demanding that any funding bill include “policy riders” to prohibit funding for abortion and family planning, the EPA’s enforcement of climate change rules, and the implementation of the Affordable Care Act. These issues are irrelevant to funding the government and simply complicate negotiations while increasing the likelihood of an impasse, and thus a shutdown. As Obama said Tuesday, “What we can’t be doing is using last year’s budget process to have arguments about abortion, to have arguments about the Environmental Protection Agency, to try to use this budget negotiation as a vehicle for every ideological or political difference between the two parties.”

CHEERING A SHUTDOWN: While Republican congressional leaders repeatedly insisted there’s not “one Republican in Congress who wants a government shutdown,” this simply isn’t true. Numerous Republican representatives and senators — especially those backed by the Tea Party movement — have called for a shutdown if Democrats don’t concede to virtually everything Republicans want. And at a closed door meeting of House Republicans late Monday night, the caucus reportedly gave Boehner “an ovation when he informed them that he was advising the House Administration Committee to begin preparing for a possible shutdown.” For his part, Boehner appears averse to a shutdown, telling his GOP colleagues that if there is a shutdown, Democrats “win.” “The Democrats think they benefit from a government shutdown. I agree,” he said. But freshmen GOP lawmakers and Tea Party favorites like Rep. Mike Pence (R-IN) are charging toward a shutdown anyway. And the Tea Party activists that put many of these lawmakers in office are even more eager, rallying in front of the Capitol last week with chants demanding Republicans “Shut it down!” They repeated those calls at another rally outside the Capitol yesterday. A new Wall Street Journal/NBC News poll finds that 68 percent of self-identified tea partiers and 56 percent of self-identified Republicans want the GOP to refuse to compromise on budget talks, even if it shuts down the government. Only 28 percent of tea partiers advised GOP leaders to compromise, compared to 66 percent of independents. This puts Boehner in a very tough position. While publicly, he says he does not want a shutdown, he’s been completely beholden to the Tea Party. For instance, on ABC’s Good Morning America today, Boehner called a shutdown “irresponsible”; yet moments later said, “there’s no daylight between the Tea Party and me.” “What they want is they want us to cut spending. They want us to deal with this crushing debt that’s going to crush the future for our kids and grandkids. There’s no daylight there.”

WHAT A SHUTDOWN MEANS: While it’s still unclear exactly what government agencies and services would be taken offline in a shutdown, it is clear that “a shutdown would have real effects on everyday Americans,” as the President said last night, and federal agencies have already prepared contingency plans in case one occurs. Nearly all “non-essential” government functions — those that don’t directly protect life or property — would be shutdown, furloughing some 800,000 federal workers (out of 2.1 million). “The cost of back pay for furloughed government workers would be $174 million for each day the government is closed,” according to a Bloomberg Government analysis. Indeed, former House Speaker Newt Gingrich’s shutdowns in the mid 1990s cost taxpayers over $800 million in lost productivity. Ironically, a shutdown would also likely grow the the deficit, by increasing the costs of funding our debt, just as it did in 1995. The timing of the shutdown near tax day is particularly inconvenient, as it means the IRS “would not audit tax returns and would not issue refunds to taxpayers who file returns on paper.” For Social Security, a shutdown means that while current beneficiaries could still receive checks, “[a] huge backlog of applications for Social Security disability benefits would grow even larger.” The National Institutes of Health would stop accepting new patients. The State Department would stop or delay issuing passports for Americans and visas for foreigners. The Federal Housing Administration, “the world’s largest insurer of mortgages, could not make new loan guarantees for home buyers,” while the Small Business Administration would stop processing loan applications. And the Securities and Exchange Commission and Commodity Futures Trading Commission would shut down much of their activities, while “95 percent of workplace safety complaints” would go unanswered. National Parks and Smithsonian Institution museums would close. Meanwhile, “If a shutdown were to happen, the federal money that helps states pay the administrative costs of their stretched unemployment programs could dry up.” This could put immense strain on states that are already struggling to deal with big budget shortfalls from the Great Recession. But the most troubling outcome of a shutdown is that troops fighting in Iraq and Afghanistan would not be paid. While the Pentagon could pay one week’s worth of work, “all uniformed military personnel would continue to work but would stop receiving paychecks” after that. Speaking to troops in Iraq today, Defense Secretary Robert Gates said an interruption in pay would hurt military families, many of whom now live paycheck to paycheck. “I hope this thing doesn’t happen,” Gates said.