Congressional negotiators closed in on a spending deal Tuesday after President Trump backed off his demand for border wall funding, saying he doesn’t need an immediate infusion of cash for the project, clearing the way for Capitol Hill to hash out a bill that avoids an end-of-week government shutdown.
The shift in strategy at the White House raised doubt about funding for the rest of Mr. Trump’s agenda. Republican negotiators focused on getting increased military spending, a top priority for the president, but little else in the bargain with Democrats.
In exchange for the military buildup, Democrats want crucial Obamacare payments and other nondefense spending, including full funding for agencies such as the Environmental Protection Agency that Mr. Trump vowed to cut.
Mr. Trump insisted that there would be enough funding to get started on plans for a wall on the border with Mexico, which is one of his most prominent promises from the campaign.
“The wall is going to get built, by the way,” he told reporters at a White House event with farmers, adding that it would get built “soon.”
“We’re already preparing. We’re doing plans. We’re doing specifications. We’re doing a lot of work on the wall, and the wall gets built,” he said. “The wall is very, very important.”
White House press secretary Sean Spicer said the spending bill would reflect the president’s priorities.
“We’ve made our priorities very clear as we continue to negotiate. And I think nothing has changed on the president’s priorities,” he said.
The bill under negotiation would fund the government for the remainder of the fiscal year that ends Sept. 30. The president then would look to get his priorities addressed in the spending bill for the next fiscal year.
The funding for the wall had become a major sticking point in negotiations with Democrats. They called it a “poison pill.”
Despite Republicans having control of the White House and both chambers of Congress, the narrow party division in the Senate gives the Democratic minority the ability to cause a government shutdown, and they’ve argued that they would only do so if provoked by Republicans.
“I want to say that it’s really good news that President Trump seems to be taking the wall off the table in the negotiations we’re having on an appropriations bill this week,” Senate Minority Leader Charles E. Schumer, New York Democrat, said on the Senate floor.
He said any increase in defense spending had to be matched with the same level of increase in domestic spending, a traditional demand from Democrats.
Some of the spending items he put at the top of the Democrats’ wish list included the Obamacare payments, an extension of health care coverage for miners and measures to deal with Puerto Rico’s budget crisis.
“There are other issues to resolve as well, but I’m hopeful we can address them as the week moves forward,” said Mr. Schumer. “Poison pill riders are something that could really hurt the bill, and we don’t want that to happen.”
Some of these issues have bipartisan support, such as taking care of the miners.
Senate Majority Leader Mitch McConnell, Kentucky Republican, came out in support of a fix for the miners, who are an important constituency in his state.
Mr. McConnell also said that the chief impediment to a deal has been Mr. Schumer’s refusal to talk to the White House.
“There have been some challenges in getting Sen. Schumer to interact with the White House. I’ve had no problems with the White House,” he said.
The biggest remaining obstacle to a deal was the Democrats’ demand that the spending package include Obamacare payments to insurers.
Democratic negotiators from the House and Senate are insisting on language that permanently funds the payments known as “cost-sharing reductions.”
The payments reimburse insurers for paying the out-of-pocket costs of low-income consumers on Obamacare’s web-based exchanges.
House Republicans zeroed out funding for the cost-sharing reductions in past years and won a lawsuit saying the Obama administration was unlawfully making the payments without permission from Congress.
Mr. Trump has threatened to cut off the payments by dropping an appeal of that decision, which allowed payments to proceed on autopilot for now, saying it will force Democrats to negotiate a health care overhaul.
House Minority Whip Steny H. Hoyer said that with health care for 7 million Americans on the line, it was Mr. Trump’s duty to reimburse insurers as prescribed by the 2010 Affordable Care Act.
“In my view, it’s not part of some quid pro quo from them to us. It is the law. It ought to be done,” said the Maryland Democrat.
The nonpartisan Kaiser Family Foundation crunched the numbers and estimated that taxpayers’ costs would actually rise by $2.3 billion if the cost-sharing payments were eliminated.
Though some insurers might just exit the marketplace, those who choose to remain must cover low-income consumers’ costs whether they’re reimbursed or not, so they would likely hike their premiums by an average of 19 percent, according to the foundation.
Obamacare’s taxpayer-funded subsidies would have to keep pace with soaring premiums, resulting in more spending.
Assuming similar enrollment and subsidy uptake in 2018 as in this year, Kaiser estimated the government would have to pay out $12.3 billion in additional subsidy payments, outweighing the $10 billion saved by axing the cost-sharing reductions.