President Donald Trump has appeared to back off his demand for five billion dollars to build a border wall, signalling for the first time that he might be open to a deal that would avoid a partial government shutdown.
The White House set the tone when press secretary Sarah Huckabee Sanders indicated that Mr Trump does not want to shut down the government, though just last week he said he would be “proud” to do so.
The president would consider other options and the administration was looking at ways to find the money elsewhere, Ms Sanders said.
It was a turnaround after days of impasse. Without a resolution, more than 800,000 government workers could be furloughed or sent to work without pay beginning at midnight on Friday, disrupting government operations days before Christmas.
One option that has been circulating on Capitol Hill would be to simply approve government funding at existing levels, without a boost for the border, as a stopgap measure to kick the issue into the new Congress next month.
The chairman of the Appropriations Committee, Senator Richard Shelby, confirmed late on Tuesday his office was preparing legislation to keep government funded, likely into February.
The White House preference was for a longer-term package, although the conversation remained fluid and Mr Trump has been known to quickly change course, said a person familiar with the negotiations.
“We want to know what can pass,” Ms Sanders said at a press briefing. “Once they make a decision and they put something on the table, we’ll make a determination on whether we’ll move forward.”
She also said the president “has asked every agency to look and see if they have money that can be used”.
The turn of events kick-started negotiations that had been almost nonexistent since last week’s televised meeting at the White House, when Mr Trump neither accepted nor rejected the Democrats’ offer.
They had proposed keeping funding at current levels of 1.3 billion dollars (£1.03 billion) for border security fencing and other improvements, but not for the wall.
The Senate’s top Republican and Democratic leaders began negotiating new proposals and talks were expected to continue.
Senate Majority Leader Mitch McConnell said he was confident there would not be a government shutdown.
Mr McConnell said a stopgap measure could be approved, though he suggested that House Minority Leader Nancy Pelosi, who is poised to become House speaker when the Democrats take control on January 3, would not want to saddle the new year with a budget brawl.
“If I were in her shoes, I would rather not be dealing with this year’s business next year,” Mr McConnell said.
Ms Pelosi and Senate Minority Leader Chuck Schumer have made it clear they are not interested in funding Mr Trump’s border wall.
During a meeting earlier Tuesday on Capitol Hill, Mr McConnell had proposed 1.6 billion dollars (£1.12 billion)for border fencing, as outlined in a bipartisan Senate bill, plus an additional one billion dollars that Mr Trump could use on the border, according to a senior Democratic aide.
Democratic leaders immediately spurned the proposal. Mr Schumer called Mr McConnell to reject it.
“We cannot accept the offer they made of a billion-dollar slush fund for the president to implement his very wrong immigration policies,” Ms Pelosi told reporters. “So that won’t happen.”
Democrats also rejected the administration’s idea of shifting money from other accounts to pay for Mr Trump’s wall.
Mr Schumer said there will be no wall money, “plain and simple”.
Ms Pelosi will probably be able to quickly approve a longer-term measure to keep government running in the new year. She called it a “good sign” that the White House appeared to be backing off its demands.
The White House showed its willingness to budge as it became apparent the president does not have support in Congress for funding the wall at the five billion dollar (£3.95 billion) level.
Ms Sanders said on Tuesday there are “other ways” to secure the funding.
“At the end of the day, we don’t want to shut down the government,” Ms Sanders said on Fox News Channel. “We want to shut down the border from illegal immigration.”
Ms Sanders pointed to the Senate’s bipartisan appropriation measure for the Department of Homeland Security, which provides 26 billion dollars (£20.5 billion), including 1.6 billion dollars for fencing and other barriers. It was approved by the committee in summer on a bipartisan vote.
“That’s something that we would be able to support,” she said, as long as it is coupled with other funding.
But House Democrats largely reject the Senate’s bill because it includes 65 miles of additional fencing along the Rio Grande Valley in Texas.
Mr Trump had campaigned on the promise that Mexico would pay for the wall. Mexico has refused.
It is unclear how many House Republicans, with just a few weeks left in the majority before relinquishing power to House Democrats, will even show up midweek for possible votes. Many Republicans say it is up to Trump and Democrats to cut a deal.
The standoff dispute could affect nine of 15 Cabinet-level departments and dozens of agencies, including the departments of Homeland Security, Transportation, Interior, Agriculture, State and Justice, as well as national parks and forests.
Mr Shelby expected the stopgap measure, which would cover the seven appropriation bills for those departments, would pass. “Who would want to shut the government down?” he said.
Congress did pass legislation to fund much of the government through the fiscal year, until October 1. But a partial shutdown would occur at midnight on Friday on the remaining one-fourth of the government.