US Speaker Johnson flags new plan to avoid shutdown

Veering toward a midnight government shutdown, House Speaker Mike Johnson is proposing a new plan that would temporarily fund federal operations and disaster aid, but punts President-elect Donald Trump demands for a debt limit increase into the new year.

House Republicans have been meeting behind closed doors on next steps after Trump doubled-down on his insistence that a debt ceiling increase be included in any deal ? and if not, he said in an early morning post, let the closures "start now."

"We will not have a government shutdown," Johnson said as he left the basement session at the Capitol.

Johnson declined to disclose the new idea under consideration but lawmakers said it would fund the government at current levels through March and adds $US100 billion ($A160 billion) in disaster aid and $US10 billion ($A16 billion) in agricultural assistance to farmers.

Gone would be Trump's demand for a debt ceiling, which GOP leaders told lawmakers would be debated as part of their tax and border packages in the new year.

It is almost impossible to meet Trump's last minute pressure. Johnson knows there won't be enough support within the Republican Party majority to pass any package, since many Republicans prefer to slash federal government rather than fund it, and won't allow more debt.

Instead, Johnson has been in talks on Friday with Democratic Leader Hakeem Jeffries whose party's support will be needed to ensure passage of any deal.

Votes are possible on Friday afternoon.

"We will meet our obligations," Johnson said.

Trump, who has not yet been sworn into office, is showing the power and limits of his sway with Congress, as he intervenes and orchestrates affairs from Mar-a-Lago, alongside his billionaire ally Elon Musk, who is heading up the incoming administration's new Department of Government Efficiency.

"If there is going to be a shutdown of government, let it begin now," Trump posted early in the morning on social media.

Trump does not fear government shutdowns the way Johnson and the lawmakers see federal closures as political losers that harm the livelihoods of Americans.

The incoming Trump administration vows to slash the federal budget and fire thousands of employees.

Trump himself sparked the longest government shutdown in history in his first term at the White House, the month-long closures over the 2018-19 Christmas holiday and New Year period.

More importantly for the president-elect is his demand for pushing the thorny debt ceiling debate off the table before he returns to the White House.

The federal debt limit expires January 1, and Trump doesn't want the first months of his new administration saddled with tough negotiations in Congress to lift the nation's borrowing capacity. It gives Democrats, who will be in the minority next year, leverage.

"Congress must get rid of, or extend out to, perhaps, 2029, the ridiculous Debt Ceiling," Trump posted ? increasing his demand for a now five-year debt limit increase. "Without this, we should never make a deal."

Johnson is racing behind closed doors to prevent a shutdown, but his influence has its limits.

Trump and Musk unleashed their opposition ? and social media army ? on the original plan Johnson presented, which was a 1500-page bipartisan compromise he struck with Democrats that included the disaster aid for hard hit states, but did not address the debt ceiling situation.

A Trump-backed second plan, Thursday's slimmed down 116-page bill with his preferred two-year debt limit increase into 2027, failed in a monumental defeat, rejected by most Democrats as an unserious effort ? but also Republicans who refuse to pile on the nation's red ink.

On Friday morning, Vice President-elect JD Vance arrived early at the speaker's office at the Capitol, where a group of the most hardline Republican holdouts from the House Freedom Caucus were meeting with Johnson.

Government workers have already been told to prepare for a federal shutdown which would send millions of employees ? and members of the military ? into the holiday season without pay cheques.

President Joe Biden, in his final weeks in office, has played a less public role in the debate, drawing criticism from Trump and Republicans who are trying to shift the blame for any shutdown on him.