Erin Kelly

USA TODAY

WASHINGTON — Federal subsidies that help low-income Americans pay for health insurance under Obamacare became the latest sticking point Wednesday for negotiators trying to reach agreement on legislation to prevent a government shutdown at midnight Friday.

Democrats want language in the bill to ensure that federal subsidies owed to health insurance companies under Obamacare are paid so that insurance premiums don't increase for low-income families by 15% or more. The payments offset some of the costs to insurers for providing lower-priced coverage.

Trump had threatened to withhold the payments to force Democrats to bargain on a health care bill to replace the Affordable Care Act, although the White House appeared to back away from that threat Wednesday afternoon with just two days left to stop a government shutdown.

House Minority Leader Nancy Pelosi, D-Calif., talked to White House Chief of Staff Reince Priebus twice Wednesday and was told the Trump administration would continue to pay the subsidies to insurers. Democrats will continue to push to get that in writing in the bill.

"Our major concerns in these negotiations have been about funding for the (border) wall and uncertainty about the (Obamacare subsidy) payments crucial to the stability of the marketplaces under the Affordable Care Act," Pelosi said in a statement. "We’ve now made progress on both of these fronts."

The fighting over the Obamacare subsidies came a day after negotiations appeared to get easier when President Trump backed off his demand for immediate funding for a Southwest border wall, opting instead to fight for money in the 2018 budget.

Senate Minority Leader Chuck Schumer, D-N.Y., said "it is good that once again the president seems to be backing off his threat to hold health care and government funding hostage."

"These payments are essential to ensuring that millions of Americans won’t see their premiums skyrocket, and they won’t be kicked off their plan," Schumer said. "Like the withdrawal of money for the wall, this decision brings us closer to a bipartisan agreement to fund the government and is good news for the American people. There are outstanding issues to be resolved, particularly with riders, but this is a positive development for the negotiations."

House Speaker Paul Ryan, R-Wis., told reporters Wednesday that the Obamacare cost-sharing payments would not be included in the government funding bill.

"Obviously, (cost-sharing payments), we're not doing that," he said. "That's something separate that the administration does."

Sen. Lindsey Graham, R-S.C., said Democrats will be to blame if there's a shutdown over the Obamacare payments. He said the federal subsidies were never authorized by Congress and the Obama administration paid them "in violation of the law."

“I find it hard to believe the Democrats would shut down the government over the inclusion of Obamacare cost-sharing payments," Graham said. "President Trump would be right to stand his ground against this foolish demand. To be clear, I view these payments as unconstitutional — and believe they should not be made at all ... Democrats would be acting irresponsibly by insisting the government shut down over this outrageous demand."

Congress passed a stop-gap spending measure in December that funded federal agencies through April 28. Republicans, Democrats and the White House are negotiating a bill aimed at funding federal agencies through Sept. 30.

Pelosi squared off with Mick Mulvaney, director of the White House Office of Management and Budget, over the Obamacare subsidy issue during negotiations on Tuesday night. Mulvaney served in the House before Trump tapped him to run the OMB, and Pelosi called him "a chief architect of the government shutdown in 2013."

"Our country would be damaged by another Republican government shutdown, and given that Republicans hold the White House and have majorities in both the House and Senate, it is their responsibility to avert such a crisis," she said.

Democrats appear to be emboldened after Trump backed off his demand for immediate funding for a wall along the U.S.-Mexico border.

Democratic congressional leaders had warned Monday that Trump's demand for $1.4 billion in emergency funds to begin construction of a wall on the U.S.-Mexico border would lead to a government shutdown because they would not support the funding. Republican leaders need Democrats to help them pass the legislation to keep the government open.

Trump's initial demand for border wall funding was part of a $33 billion funding request that included $30 billion in extra spending for defense and combat operations and $3 billion for border security, including the wall. Congress is likely to give the president more than $15 million in additional defense spending and some extra money for overall border security that does not include the wall.

Read more:

Trump promises to build border wall in his first term

What would a government shutdown mean for you?

Government shutdown less likely now that Trump has relented on border wall

While praising Trump for dropping his demand for immediate funding for the wall, Schumer said Wednesday that may not be enough to win Democrats support for the legislation.

"We Democrats remain committed to fighting President Trump’s cutbacks on women’s health, rollback of financial protections in Wall Street reform, rollbacks of protections for clean air and clear water, against a deportation force," Schumer said on the Senate floor. "So those are the kind of poison pill riders that could hurt an agreement."

In addition to the Obamacare payment provision, Democrats are seeking aid for Puerto Rico, which is about to run out of Medicaid money and face a major health care crisis, Schumer said.

Senate Majority Leader Mitch McConnell, R-Ky., implied that Democrats' demands are holding up an agreement.

"Conversations are ongoing about the way forward on a government spending bill," McConnell said Wednesday on the Senate floor. "Our friends on the other side of the aisle sent me a letter asking for this bill to reject poison pill riders. I would suggest that, if they take their own advice, we can finish this negotiation and produce a good agreement that both sides can support."

Both Schumer and McConnell have said they want to add a provision to the bill to extend health care benefits for retired union coal miners, who will lose those benefits at midnight Friday unless Congress acts.

Despite the latest battle over the spending bill, Ryan told reporters Wednesday that he is optimistic that a compromise will be reached and a shutdown will be averted.

"We're getting really close," the Wisconsin Republican said. "I think we're making really good progress. Now it's just kind of getting down to our final details."

Ryan said he believes lawmakers can avoid the need to pass a short stop-gap measure to fund the government for a few days to give Congress more time to negotiate a longer-term spending bill.

"That's not our intention or goal," he said. "We want to get this done on time. That's our plan."

Ryan did not provide any details of what will be in the bill, except to say that it will include "strengthening our national defense."