The US Senate has failed to pass the new budget and prevent the shutdown of many federal services.
A bill to fund the federal government for the coming weeks did not receive the required 60 votes by the deadline of midnight on January 19.
President Donald Trump accused the Democrats of putting politics above the interests of the American people.
The Democrats blame him for rejecting bipartisan compromise proposals.
Negotiations in both houses of Congress continued on January 20, Senate Republican leader Mitch McConnell said the chamber would be back in session on the next day to try to end the impasse.
The White House budget chief has expressed optimism that a resolution will be found before January 22.
If not, hundreds of thousands of federal workers face the prospect of no work and shuttered offices at the start of the working week.
The last government shutdown was in 2013, and lasted for 16 days.
This is the first time a government shutdown has happened while one party, the Republicans, controls both Congress and the White House.
The January 19 vote was 50-49, falling far short of the 60 needed to advance the bill. With a 51-seat majority in the Senate, the Republicans did not have enough seats to pass the bill without some support from the Democrats.
They want funding for border security – including the border wall – and immigration reforms, as well as increased military spending.
The Democrats have demanded protection from deportation of more than 700,000 undocumented immigrants who entered the United States as children.
The Republicans added a sweetener in the form of a six-year extension to a health insurance program for children in lower-income families. However, Democrats want this program extended permanently.
President Trump accused the Democrats of being “far more concerned with illegal immigrants than they are with our great military or safety at our dangerous southern border”.
However, the leading Senate Democrat, Chuck Schumer, blamed the president, saying President Trump was under pressure from “hard-right forces within the administration”.
White House spokeswoman Sarah Sanders warned: “The president will not negotiate on immigration reform until Democrats stop playing games and reopen the government.”
The US budget must be approved by October 1 – the start of the federal financial year.
However, Congress has often failed to meet this deadline and negotiations continue well into the new year, with the previous year’s funding to federal agencies extended on a temporary basis.
Because Congress failed to agree an extension that would have maintained government funding through to February 16, it means many federal agencies effectively closed for business as of 00:01 on January 20.
Most staff in the departments of housing, environment, education and commerce will be staying at home on January 22. Half of workers in the treasury, health, defense and transportation departments will also not be going to work.