The White House said President Obama is "deeply concerned" about the impacts of a House Republican funding measure that would avoid a government shutdown but lock the sequester in the rest of the fiscal year. But the statement stopped short of threatening a veto, as congressional leaders expressed new optimism that a showdown could be averted.

The House is scheduled to vote Wednesday on the $982 billion measure, which would ensure that the government remains open past March but allows the sequester to remain in place. It would provide new flexibility, mostly only to the Pentagon, which absorbed half of the $85 billion across-the-board cut, to manage the impacts of the reduction.

Senate leaders indicated Tuesday that Democrats will most likely seek amendments to the continuing resolution after it passes the House to provide additional flexibility for domestic programs too. But both Senate Majority Leader Harry M. Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) indicated Tuesday that negotiations over amendments are going well.

McConnell said he had spoken to both Reid and Appropriations Chairwoman Barbara Mikulski (D-Md.) and was confident that the two sides would agree on the bill before the bill currently keeping government running elapses March 27.

"We are optimistic that we'll be able to pass a CR both through the House and the Senate at the sequester level and thereby not have a huge dispute over the continued operation of the government for the rest of the year," McConnell told reporters. "There seems to be no interest on either side in having a kind of confrontational government shutdown scenario."

Reid said both sides had agreed on the "level that we think is appropriate" for spending, and the discussion now is about providing new abilities for domestic programs to blunt the impact of the cuts.