'Progress' but still no deal to avoid US govt shutdown

President Donald Trump and the Senate's top Democrat on Friday (Jan 19) both touted "progress" in 11th hour talks on breaking an impasse over spending, raising hopes that a US government shutdown could be averted.

With a midnight deadline looming to reach a short-term deal to keep the federal government running at full capacity, both Trump and Senator Chuck Schumer struck an optimistic tone.

"Excellent preliminary meeting in Oval," Trump tweeted, saying they were "working on solutions" with Republican Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan.

"Making progress - four week extension would be best!" Trump added.

But Schumer admitted that a "good number of disagreements" remain between the two sides, despite what he described as a "long and detailed meeting," at which they discussed "all of the major outstanding issues."

"The discussions will continue," the New York Democrat told reporters.

The president shelved plans to fly to Florida to celebrate the first anniversary of his inauguration at his Mar-a-Lago estate - which falls on Saturday - to remain in Washington to ride out the storm, and the possible late-night Senate votes.

"He's not leaving until this is finished," White House budget director Mick Mulvaney told reporters.

"There's a really good chance it gets fixed" before government offices open on Monday, Mulvaney added.

Trump seemed to revel in the high-stakes brinksmanship unfolding in Washington, with Senate passage of a government funding extension that was pushed through the House of Representatives on Thursday up in the air.

"Shutdown coming?" he tweeted to begin the day Friday. White House officials said he made several calls to Democrats to try to win votes before his talks with Schumer.

"Democrats are needed if it is to pass in the Senate - but they want illegal immigration and weak borders," Trump said on Twitter.

Republicans, who have a tenuous one-seat majority in the Senate, need as many as a dozen Democratic crossover votes to reach the 60 votes required for passage.

Democrats, however, appeared determined to block the measure, insisting on a deal that would protect from deportation so-called "Dreamers" - the 700,000 immigrants who entered the country illegally as children.

The House measure, which would extend federal funding until Feb 16, reauthorizes for six years a health insurance program for poor children - a long-time Democratic objective - but not the Deferred Action on Childhood Arrivals program, known as DACA, that affects Dreamers.

White House officials insisted there was no urgency to fix DACA, which expires Mar 5.

"This is purely an attempt by the Senate Democrats led by Schumer - why we call it the 'Schumer shutdown' - to try and get a shutdown the president gets blamed for," Mulvaney said.

With mid-term congressional elections looming later this year, Republicans risk being blamed by voters if the government grinds to a halt over lack of funds.

A new Washington Post/ABC poll found that 48 per cent of Americans blame Trump and the Republicans for a potential shutdown, and only 28 per cent hold Democrats responsible.

There have been four government shutdowns since 1990. In the last one in 2013, more than 800,000 government workers were put on temporary leave.

Essential functions like the military, law enforcement, the White House and Congress would continue working but with reduced staff. Some agencies would shut down altogether.

But others in the massive bureaucracy will be sent home without pay.

International ratings agency Fitch said a partial shutdown was unlikely to affect America's AAA/stable rating for US sovereign debt.

And Wall Street seemed unconcerned so far, with the S&P and Nasdaq closing at new records.

Schumer said if agreement is not reached by Friday night, Democrats would support a shorter-term funding measure that would "give the president a few days to come to the table."

McConnell said the House bill provides for four weeks of funding, enough to allow talks to continue "without throwing the government into disarray for no reason."

Negotiations with the White House on a bipartisan compromise on DACA blew up last week after Trump reportedly referred to African nations and Haiti as "shithole countries."

Trump's unpredictable Twitter outbursts and sudden changes of position also have bedeviled Republican leaders as they maneuver to cut a deal.

In the past, Schumer has described Trump as "like a Sphinx on this issue," a sentiment Republicans also appeared to share.

"We need to know where the president stands," Senator John Kennedy, a Republican from Louisiana, said on Friday on CNN.

"Let's suppose we reach an agreement with the Democrats, and I think we will - I want to know the president is going to sign it."