By Kristina Peterson and Laura Meckler 

WASHINGTON -- Congress begins its likely final week of 2017 with lawmakers from both parties forced to grapple with tough questions they have deferred all year, including immigration and the federal budget.

The government's current funding expires Saturday at 12:01 a.m., with no clear plan in sight on how to keep it running. In one major obstacle, GOP and Democratic leaders have yet to agree with the White House on where overall spending levels should be set for the next two years.

Nor have they struck a deal on how to handle the so-called Dreamers, young people living in the U.S. illegally who were brought here as children. President Donald Trump in September ended an Obama-era program shielding them from deportation, urging Congress to pass new legislation by March, when some of these immigrants begin losing protections.

Some Democrats have said they would withhold their support from the spending bill needed to prevent a government shutdown if it doesn't include protections for Dreamers, but their leaders haven't made the same pledge. Republicans, meanwhile, are divided over the issue.

"It's an open question on how far we are going to push" on immigration, said Rep. Rick Larsen (D., Wash.). "It's a tough balance because we have a broader responsibility to keep the government open."

Republicans control both chambers of Congress, but Democrats have influence because their votes are usually needed to pass spending bills in the House and always in the Senate, where such measures need 60 votes to clear procedural hurdles. Republicans now hold 52 seats, and that number will shrink by one after Sen.-elect Doug Jones, an Alabama Democrat, is sworn in early next year.

Both parties want to avoid the return of across-the-board spending limits, known as sequestration, that were established in 2011 and are set to kick back in. A two-year budget deal that set spending above those caps ended in September, and the government has been funded at those levels since then. Republicans are eager to boost spending for the military above those limits; Democrats insist that any defense increase be matched by a comparable lift in nondefense spending.

GOP leaders would face anger from conservatives if they agree to boost nondefense spending without making deep cuts elsewhere in the budget. Passage of a sweeping tax overhaul, expected to clear Congress this week, could help ease the sting of a budget deal.

Still, congressional leaders have said there wouldn't be enough time this week to write detailed spending legislation that would fund the government for the rest of the fiscal year, which goes through next September. That means any budget deal this week would likely be a short-term spending patch keeping the government funded into January to buy a little more time.

"It would be my preference to get an agreement sooner, rather than later, " House Speaker Paul Ryan (R., Wis.) said last week, noting that he wasn't sure that could happen this week.

Lawmakers are expected to leave Washington by Friday, but if they can't agree on how to fund the government, their departure could be delayed.

Even a short-term spending bill has become controversial.

House GOP leaders have said they plan to pass a measure that would fund the military through September, but the rest of the government only through Jan. 19. Democrats have labeled that a "Punt-agon" approach, saying it would fail in the Senate.

Republican leaders then may revert to the usual fall-back: a simple extension of current funding for all of the government for a few weeks into January, GOP aides said. Democrats are pushing to make sure that some of their requests hitch a ride to the year's final spending bill, including reauthorization of the Children's Health Insurance Program, funding for community health centers and resources to combat the country's opioid epidemic.

But Democrats would face a backlash from liberals if they support a year-end spending bill without resolving the fate of the Dreamers. A bipartisan Senate group is trying to write compromise legislation but may not be able to finish by week's end.

If the matter gets punted to 2018, immigrant-rights advocates are convinced that Republican leverage would grow and that the GOP would use it to demand what they see as unacceptable enforcement provisions. The closer that the March deadline gets, they say, the more power the GOP wields.

"We're increasingly convinced if we don't enact a Dream Act by the end of the year it's just not going to happen," said Frank Sharry of the advocacy group America's Voice, referring to legislation allowing Dreamers to remain in the U.S. legally.

Democratic leaders haven't pledged to withhold support for a spending bill if immigration protections are absent, saying the issue is one among many priorities.

Activists staged protests last week, hoping to add to the year-end pressure.

"I am a DACA recipient who is tired of all the uncertainties we have faced," said Cata Santiago, a 20-year-old from Homestead, Fla., whose protections under the Deferred Action for Childhood Arrivals program expire next November.

She protested Friday in the office of Rep. Carlos Curbelo, a Republican who represents her community and says he favors legal protections for Dreamers. The protest aimed to pressure him to oppose any year-end spending bill without Dreamer protections. She and others were arrested when they refused to leave his office.

Last week, Dreamers also protested in the office of Senate Minority Leader Chuck Schumer, a sign they fear his reassurances on the issue might be wobbling.

About three dozen House Republicans have told GOP leaders they want to resolve the immigration dispute in the next spending bill, but many conservatives have been emphatic that the two issues must be separate.

Write to Kristina Peterson at kristina.peterson@wsj.com and Laura Meckler at laura.meckler@wsj.com

(END) Dow Jones Newswires

December 17, 2017 16:33 ET (21:33 GMT)

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