By Richard Cowan


WASHINGTON (Reuters) - A deal on immigration as part of a new stopgap funding bill to avert a government shutdown appeared less likely on Wednesday after a Democratic senator said the White House is making unacceptable demands on immigration measures.


The White House dispatched chief of staff John Kelly to meet with the Congressional Hispanic Caucus to ease tensions over the status of "Dreamers" - young Hispanic adults brought to the country illegally when they were children - that is threatening to derail efforts on a temporary funding needed by Friday.


After the meeting, the two sides seemed as far apart as ever.


Government funding currently is being provided through a third temporary measure since the 2018 fiscal year began on Oct. 1. If Congress approves another temporary "continuing resolution" for spending, it will run through Feb. 16.


Agreement on a spending bill also is complicated by disagreements within the Republican Party, which holds majorities in both the Senate and House of Representatives.

Senator Robert Menendez said the White House was holding Dreamers hostage in an attempt to get a growing list of demands on immigration that he said was "simply not acceptable" to attach to the narrow issue of protecting the Deferred Action for Childhood Arrivals (DACA) program and securing U.S. borders.

Menendez, a Democrat who helped craft a Senate bipartisan immigration measure that Republican President Donald Trump rejected last week, said he hoped Kelly "got a very clear view they're going to have to come more to the center if they truly want a fix.

Democratic Representative Raul Grijalva left the meeting saying he was not "terribly optimistic" about getting a deal with the White House.

Republicans are working on another short-term spending bill to keep the government open beyond Friday, Senate Majority Leader Mitch McConnell said on Wednesday.

The funding measure does not include a legislative shield for Dreamers but it does grant Democrats an unrelated, high-priority measure: a six-year reauthorization of the Children's Health Insurance Program (CHIP).

Senate Democratic Leader Chuck Schumer dismissed the Republican stopgap proposal.

"It doesn’t give help needed for our veterans who wait on-line for service," he said. "It doesn’t fight opioid addiction – the scourge of America. It doesn’t help our pensions. And ... it doesn’t give defense what it needs, either. It's a loser."


It was unclear whether Democrats would support another continuing resolution spending measure - especially if it does not contain the immigration provision.

House Speaker Paul Ryan criticized Democrats for using DACA as leverage for helping pass a government funding measure.

Republicans also need to win support from fiscal conservatives in their own party. Ryan said party leaders have not checked whether Republicans have enough votes to keep government open.

"I think cool heads hopefully will prevail on this," he said.

It also was unclear whether the conservative House Freedom Caucus would back the new plan. A Freedom Caucus source told Reuters the group, at a meeting on Tuesday night, "generally did not support leadership’s current strategy" on the stopgap bill although they did not take an official position.

The source said the caucus would rather fully fund the U.S. military for the rest of the fiscal year while just extending domestic spending at current levels for a month, as negotiations on an overall budget agreement continue.

The Republicans' majority in the Senate is slim, meaning they need some Democratic support to pass a government funding measure.

Republican Senator Lindsey Graham, one of the backers of the bipartisan deal floated last week, said it was naive for Republicans to believe they could get all the defense funding they want but deal with Dreamers later.

"I do know how this movie ends and I want you to know how it ends: We're not going to leave 800,000 people out in the cold with no place to go," Graham said at the American Enterprise Institute on Wednesday.

(Reporting by Richard Cowan and Susan Cornwell; Additional reporting by Katanga Johnson, Lisa Lambert, Susan Heavey, Blake Brittain, Doina Chiacu; Writing by Doina Chiacu; Editing by Bill Trott)