In a 232-198 vote on Friday, the House defeated a measure that would extend government funding by 30 days and avert a shutdown. That bill would have cut spending and imposed immigration and border security restrictions, Republican priorities that had little chance of passing the Democratic-majority Senate.
The Senate, meanwhile, has been advancing a bipartisan stopgap bill to fund the government through to November 17, though it was not clear when they would vote.
"It's not the end yet, I've got other ideas," Republican House Speaker Kevin McCarthy told reporters following the defeat of the bill he had backed.
He declined to say what those ideas were.
If Congress does not pass a spending package that can be signed into law by President Joe Biden before 12.01am on Sunday, US national parks will close, the Securities and Exchange Commission will suspend most of its regulatory activities, and pay for up to four million federal workers will be disrupted.
US Treasury Secretary Janet Yellen on Friday said a government shutdown would undermine US economic progress by idling programs for small businesses and children, and could delay major infrastructure improvements.
The shutdown would be the fourth in a decade and only four months after a similar standoff brought the federal government within days of defaulting on its $US31 trillion ($A48 trillion) debt.Â
The repeated brinkmanship has raised worries on Wall Street, where the Moody's ratings agency has warned it could damage US creditworthiness.
McCarthy had hoped the Republican spending bill's border provisions would have won over at least nine hardline holdouts who so far have defied efforts to avert a shutdown.
Democrats had warned that the Republican bill would slash benefits for poor women and children and resources for fighting wildfires.
In the end, 21 hardline House Republicans sided with Democrats to defeat the measure.
Former President Donald Trump, Biden's likely election opponent in 2024, criticised Senate Republicans for working with Democrats on a funding agreement.
