The odds of congressional negotiators reaching a deal to lift budget caps and raise the debt ceiling ahead of their Memorial Day recess appear to be growing increasingly grim despite top lawmakers's earlier optimism.

"The first meeting went pretty well the second meeting not as well,” House Minority Leader Kevin McCarthy Kevin Owen McCarthyMcCarthy threatens motion to oust Pelosi if she moves forward with impeachment Kate Schroder in Ohio among Democratic challengers squelching GOP hopes for the House McCarthy's Democratic challenger to launch first TV ad highlighting Air Force service as single mother MORE (R-Calif.) said Wednesday. “I think it will take a little more time."

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Disagreements over nondefense discretionary spending remain a key sticking point between parties, with Republicans arguing Democrats are requesting “obscene” levels of spending. And while offers continue to be exchanged, no additional meetings between the “big four” — Speaker Nancy Pelosi Nancy PelosiHoyer: House should vote on COVID-19 aid — with or without a bipartisan deal Ruth Bader Ginsburg lies in repose at Supreme Court McCarthy threatens motion to oust Pelosi if she moves forward with impeachment MORE (D-Calif.) House Minority Leader Kevin McCarthy (R-Calif.), Senate Majority Leader Mitch McConnell Addison (Mitch) Mitchell McConnellFEC flags McConnell campaign over suspected accounting errors Poll: 59 percent think president elected in November should name next Supreme Court justice Mark Kelly: Arizona Senate race winner should be sworn in 'promptly' MORE (R-Ky.) and Senate Minority Leader Chuck Schumer Chuck SchumerCruz blocks amended resolution honoring Ginsburg over language about her dying wish Senate Democrats introduce legislation to probe politicization of pandemic response Schumer interrupted during live briefing by heckler: 'Stop lying to the people' MORE (D-N.Y.) — and administration officials have been scheduled, a source with knowledge of the discussions said.

The House is scheduled to fly out Thursday afternoon.

Negotiators seemed poised to strike a deal after a scheduled meeting ran long and resulted in a second meeting Tuesday. Senate Majority Leader Mitch McConnell (R-Ky.) said he expected an agreement by the end of the day.

Instead, the second meeting let out quickly with no deal.

"There are still some significant issues outstanding, particularly the domestic-side spending issues -- things like health care, infrastructure and things that average middle-class folks need,” Sen. Minority Leader Charles Schumer Chuck SchumerCruz blocks amended resolution honoring Ginsburg over language about her dying wish Senate Democrats introduce legislation to probe politicization of pandemic response Schumer interrupted during live briefing by heckler: 'Stop lying to the people' MORE (D-N.Y.) said.

Despite the impasse over nondefense spending, the group has been able to reach a general consensus around setting defense spending levels at $733 billion (including off-book spending) and a debt ceiling lift.

Pressure for Congress to take action on raising the debt ceiling was amplified Wednesday after Treasury Secretary Steven Mnuchin Steven Terner MnuchinHillicon Valley: DOJ proposes tech liability shield reform to Congress | Treasury sanctions individuals, groups tied to Russian malign influence activities | House Republican introduces bill to set standards for self-driving cars Treasury: Trump's payroll tax deferral won't hurt Social Security Treasury sanctions individuals, groups tied to Russian malign influence activities MORE warned the U.S. government could face a default by late-summer, sooner than most analysts projected.

Democrats want spending for two programs – the 2020 census and the VA mission act – to be moved to off-budget accounts, leaving more room for other domestic priorities.

House Democrats on Wednesday approved a bill that included some $8.5 billion in spending for the 2020 census. The VA Mission Act, which had previously been funded through automatic mandatory spending, is due to move nearly $9 billion onto the discretionary side of the ledger this year.

A House aide said it was "more likely that we’ll discover the moon is made of green cheese” than strike a deal this week.