Congress scrambles to wrap up deal averting U.S. government shutdown

By Richard Cowan

WASHINGTON (Reuters) - The U.S. Congress moved closer to a deal to avoid a government shutdown at the stroke of midnight on Friday, as negotiators worked to clear away remaining disputes in a massive spending bill.

House of Representatives Speaker Paul Ryan told reporters on Wednesday that he hoped there would be no need to pass a short, stopgap bill continuing spending at current levels and that a measure funding the government through September will instead be enacted in time for the midnight Friday deadline.

"We're getting really close," Ryan, a Republican, said, adding that negotiators were "getting down to the last, final" areas of disagreement.

Earlier this week, Republican President Donald Trump backed off his demand that the bill, which would spend around $1 trillion for an array of federal programs this year, include money for the "big, beautiful, powerful wall" he wants built along the U.S.-Mexican border.

That signature campaign proposal is seen by most Democrats and many Republicans as an ineffective way of securing U.S. borders.

The Trump administration likely will seek money for the wall in legislation funding the government for the fiscal year starting Oct. 1, but lawmakers are likely to balk again.

And some Democrats, who had insisted the legislation contain guarantees that the Trump administration continue healthcare subsidies for millions of low-income people enrolled in Obamacare, no longer appear willing to slow down the legislation for this. They are banking that Trump will decide on his own to back that program, at least for now.

Meanwhile, Senate Majority Leader Mitch McConnell, a Republican from the coal mining state Kentucky, threw his weight behind a plan Democrats were insisting on to make a healthcare program for coal miners permanent. It was still unclear if Ryan would go along.

If Congress cannot agree to any legislation by midnight Friday, funding for many federal agencies will abruptly stop and hundreds of thousands of federal government workers could be temporarily laid off.

Many policymakers are nervous about a repeat of 2013, when the government was shuttered for 17 days.

Even though Trump's fellow Republicans control both chambers of Congress, they only have 52 seats in the Senate. To amass the 60 votes needed there to pass the spending bill, Republicans will have to bring some Democratic lawmakers onto their side.

Still unclear was whether Republicans' demand for a $30 billion increase in defense spending for the rest of this fiscal year will be met. Democrats have insisted that any defense spending hikes be paired with similar increases in other domestic program funding.

Democrats have been seeking immediate assistance for a funding gap in Puerto Rico's Medicaid program, the federal health insurance program for the poor, saying it is in such bad shape that 1 million people are set to lose healthcare.

Also unclear is what "riders" that set new policy might be tucked into the legislation.

Past riders have touched on areas such as banning the Securities and Exchange Commission from requiring corporations to disclose political donations.

Democrats said they were worried Republicans could try to attach language limiting family-planning funds or undo Wall Street reforms enacted after the 2007-09 financial crisis.

(Additional reporting by Susan Cornwell and Lisa Lambert; Editing by Jonathan Oatis)