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WASHINGTON – With a shutdown clock ticking toward a midnight Friday deadline, congressional Republicans scrambled on Wednesday to finalize a must-pass spending bill. A major obstacle evaporated after key GOP senators dropped a demand to add health insurance subsidies for the poor.

The No. 2 House Republican, California Rep. Kevin McCarthy, said party leaders have scrapped plans to combine a short-term spending bill with $81 billion worth of disaster aid and a $658 billion Pentagon funding measure. Instead, Republicans are likely to schedule a separate vote on the disaster package, he said.

The strategy for averting a government shutdown appeared to be coming into focus, though it looks like many items on Capitol Hill’s list of unfinished business could be pushed into next year. It also appears the upcoming short-term measure will fund the government through mid-January, giving lawmakers time next month to work out their leftover business.

“I think if this all comes together we can vote and leave,” McCarthy said in anticipation of a House vote on Thursday.

Hopes for a bipartisan budget deal to sharply increase spending for both the Pentagon and domestic agencies appeared dead for the year, and Democrats were rebuffed in their demands for protections for young immigrants brought to the U.S. illegally as children.

Sens. Lamar Alexander, R-Tenn., and Susan Collins, R-Maine, announced Wednesday that they would not seek to add the insurance subsidies, which are designed to stabilize the Affordable Care Act’s markets. The tax bill repeals the requirement that individuals purchase insurance.

Trying to combine the health measure with the spending bill was a demand of Collins when President Donald Trump and Senate GOP leaders secured her vote for the party’s tax cut measure. But House conservatives strongly opposed the move.

House Republicans weren’t part of that deal, and with the tax vote over, it became plain that Senate leaders were not able to deliver for her.

‘Patch’ for CHIP: A short-term fix for an expiring program that pays for veterans to seek care outside the Department of Veterans Affairs system appeared likely. In addition, House Minority Leader Nancy Pelosi, D-Calif., said efforts were underway for a “patch” to make sure the states facing shortfalls from the Children’s Health Insurance Program, which pays for health care for 9 million children from low-income families, won’t have to purge children from the program.

The fate of the $81 billion House disaster aid measure, now likely to see a separate vote, appears unclear. Conservatives are upset with the price tag of the plan, which also contains billions of dollars for California wildfire recovery. Democrats are pressing for more help for Puerto Rico, and McCarthy signaled a willingness for at least some accommodation to win Democratic votes.

Pelosi told fellow Democrats in an emailed update that talks with Republicans have continued throughout the day but that GOP leaders aren’t yielding on a Democratic demand that nondefense spending increases match the budget boost for the Pentagon.

“Unless we see a respect for our values and priorities, we continue to urge a strong NO” on the temporary funding bill, Pelosi said.

Democrats such as Senate Minority Leader Charles Schumer of New York are arguing for a two- or three-week temporary spending bill that would send a number of unresolved issues — including disaster aid — into the new year. Schumer appears to believe that shifting as many issues as possible into next year will increase his leverage on immigration and the budget.

Also in the mix is an expiring overseas wiretapping program aimed at tracking terrorists. It has bipartisan backing but is opposed by both stout conservatives and some liberals. McCarthy said the program might just be extended for a few weeks.

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