A government shutdown appeared unlikely after President Donald Trump dropped his demands for border wall funding. | Getty White House to continue Obamacare payments, removing shutdown threat Lawmakers are expected to pass a one-week funding extension in order to finalize a deal.

The White House is telling lawmakers that it will continue paying Affordable Care Act cost-sharing subsidies, potentially defusing a bruising conflict between Democrats and Trump administration officials that had sparked a new round of shutdown fears in Washington on Wednesday.

House Minority Leader Nancy Pelosi confirmed the news Wednesday afternoon after word started spreading around the Capitol. It was not immediately clear how long the White House planned to keep the money flowing.


“Our major concerns in these negotiations have been about funding for the wall and uncertainty about the CSR payments crucial to the stability of the marketplaces under the Affordable Care Act,” Pelosi said in a statement after two phone calls with White House chief of staff Reince Priebus. “We’ve now made progress on both of these fronts.”

With Congress closing in on an agreement, lawmakers were expected to buy another week to finish the deal as a Friday evening shutdown deadline loomed, two sources said. Leaders are leaning toward passing a one-week extension of funding at current levels.

“More progress needs to be made on some of our priorities, and we continue to be concerned about poison-pill riders that are still in this legislation,” Pelosi said.

On Tuesday evening, Pelosi and President Donald Trump’s budget director clashed in a phone call over the Obamacare subsidies threatening delicate bipartisan negotiations to fund the government, according to sources familiar with the matter. The solution to the row appears to be to continue the status quo: paying for the subsidies outside of the congressional spending process. That would give Trump some future leverage over Obamacare while allowing Democrats to say they’ve protected the law, if only temporarily.

And it would allow Republicans to avoid blame for causing chaos and confusion in the insurance markets.

“If we pull the subsidies … I think there would be nobody with a health insurance plan next year.” said Rep. Phil Roe (R-Tenn.).

But some Republicans slammed the White House decision, saying it undermines the party’s position in an ongoing lawsuit that the payments are unconstitutional.

The administration choosing to continue paying the subsidies without congressional approval “is both clearly illegal and unconstitutional,” Rep. Mark Walker (R-N.C.), chairman of the conservative Republican Study Committee, said in a statement.

The movement was unlocked after the Tuesday call between Pelosi and Office of Management and Budget Director Mick Mulvaney. The California Democrat told Mulvaney that she could not support a spending bill that doesn’t include a commitment to continuing the subsidies for Americans with low incomes, according to a high-ranking Republican source briefed on the conversation. Mulvaney responded that Trump would not sign a bill to fund the government through September that includes those payments, called cost-sharing reductions, the source said.

“She’s giving him back some of his own medicine,” the source said, referring to Mulvaney’s hard-edged tactics during the 2013 shutdown, which Mulvaney supported as a conservative House member. But Mulvaney “delivered [the] message that Trump would not sign a bill with CSRs.”

A Democratic aide confirmed the call, but said the Trump administration didn’t commit to continuing to pay for crucial Obamacare subsidies starting next month, which could upend the insurance markets.

“Mulvaney indicated that, while the Trump administration had continued the CSR payments, they had not yet decided whether they would make the May payment. Mulvaney made clear that, absent congressional action, the judge’s order would stand and the administration would cease making payments,” the Democratic aide said. The GOP-led House filed a lawsuit against the Obama administration last year, arguing the subsidy payments were unconstitutional. Republicans won an initial ruling in the courts, but the decision was put on hold pending appeal.

Mulvaney, through a spokesman, said the Democratic assertion that he said the administration would stop making the subsidies next month is “false.”

“Let me be clear: The only thing standing in the way of a landmark defense and border security bill is a handful of Democrats who are insisting on an eleventh-hour bailout of Obamacare. We can get this deal done today. There is no excuse not to,” Mulvaney said. “This administration has made CSR payments in the past, and the only reason some are raising this now is to hold the government hostage and find an excuse to oppose a bipartisan agreement.”

Senate Democratic leaders seemed less dug in and leaders have said that as long as the payments continue, they are less concerned about whether it’s the administration or Congress making them.

“She’s been the hardest driver on this,” a Senate Democratic source said of Pelosi.

House Speaker Paul Ryan suggested Wednesday morning that the bill would not include the Obamacare payments.

“CSRs, we’re not doing that,” Ryan said during a news conference. “That is not in an appropriation bill, that’s something separate that the administration does.”

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Currently, the payments are made through the executive branch, but that’s subject to a lawsuit that could disrupt the approximately $7 billion in yearly payments.

Lawmakers also were finalizing language to extend insurance benefits for coal miners and aid Puerto Rico’s ailing Medicaid system. Another sticking point is a GOP push to include legislation authored by Sen. Roy Blunt (R-Mo.) that would change food labeling regulations to shield companies from lawsuits if a product was incorrectly labeled, according to two Democratic sources.

Negotiators on both sides privately concede a short-term extension is likely in order to hammer out the final details of a government funding deal.

“I think we’re very close,” said Senate Majority Whip John Cornyn of Texas.

John Bresnahan, Seung Min Kim and Rachana Pradhan contributed to this report.

