Washington (CNN) - A day after a hostile exchange that epitomized Washington gridlock, congressional leaders and the White House said Thursday were discussing ways to resolve their differences over measures to keep the government funded after Friday and extend the payroll tax cut set to expire at the end of the year.

Comments by Senate Majority Leader Harry Reid, D-Nevada, and Minority Leader Mitch McConnell, R-Kentucky, as well as House Speaker John Boehner and White House press secretary Jay Carney signaled progress toward reaching compromises on the two main pieces of legislation under discussion before Congress goes into recess until next year.