By David Lawder
WASHINGTON (Reuters) - Congressional negotiators raced on Tuesday to wrap up final policy disputes over a $1.1 trillion spending bill as a midnight Thursday deadline to avert a U.S. government shutdown drew closer.
House of Representatives Republicans were prepared to pass a short-term funding extension of one to two days if necessary to forestall a shutdown, as procedural hurdles in the Senate could delay final passage past the deadline.
The snags in the talks added some drama to a spending bill that appeared to be cruising toward passage, despite demands from conservative Republicans to withhold spending from President Barack Obama's immigration order, which would allow millions of undocumented immigrants to stay and work in the United States.
The House Appropriations Committee still hoped to unveil the funding package on Tuesday. A senior Republican aide said some disputed provisions were likely to be taken out and dealt with separately.
The measure aims to fund all government agencies through September 2015, except for the Department of Homeland Security, which would be extended only through late February, providing Republicans leverage over the agency implementing the Obama immigration order.
Senate Democratic leader Harry Reid said a key remaining issue was a Republican-authored provision aimed at shoring up distressed multi-employer pension plans. Democrats are largely opposed because it could reduce some pension payments to seniors.
"It's my understanding that issue is still alive," Reid told reporters.
Reid also said it would be difficult to remove language restricting the District of Columbia's new marijuana legalization law. The language would prevent the district from using local funds to set up and regulate the legal sale of marijuana.
The spending provisions in the "omnibus" funding bill have been worked out, keeping domestic spending largely flat with last year, and providing emergency funds to fight the Ebola outbreak in West Africa.
Current government spending authority expires at 12:01 a.m. EST (0501 GMT) on Friday.
Reid said the Senate could work into next week to finish its final business for the year, including a defense spending authorization, a tax break extension, and several nominations.
A six-year extension for a federal terrorism insurance backstop that was created after the Sept. 11, 2001, attacks was excluded from the funding bill and is being dealt with separately.
Another unresolved dispute cited by Democrats was a Republican-authored provision to prevent new restrictions on derivatives trading by large banks from taking effect.
(Additional reporting by Richard Cowan; Editing by John Whitesides and Tom Brown)