The U.S. is inching closer to a government shutdown.

BBC News says Congress has a deadline of midnight on Saturday to pass a new budget before thousands of federal employees are placed on unpaid leave.

It says the Senate has forged ahead with plans for a temporary funding agreement – which House Republicans have opposed.

The two chambers of Congress are controlled by different parties.

The Republican-led House of Representatives will likely vote on its own short-term spending bill on Friday.

Their plan would extend funding through the end of October but it has deep spending cuts that make it a non-starter for Democrats, who run the Senate.

BBC News says the conflicting House and Senate funding plans have increased the likelihood of a shutdown.

Economists have also reportedly warned that a government shutdown could damage the US economy, with Moody’s warning that it could hurt the US credit rating and “underscore the weakness of US institutional and governance strength”.