Britain issues first Amber Extreme Heat warning

LONDON (Reuters) – Britain’s Met Office issued its first ever amber extreme heat warning on Monday, saying unusually high temperatures expected western areas and continuing high night-time temperatures created potential risks to health.

The alert is the first issued by the Met Office since the national meteorological service launched its extreme heat national severe weather warning system at the start of June to help better inform people of the risks hot weather can bring.

Much of Britain has seen heatwave conditions in recent days but temperatures are expected to rise further, possibly reaching 33 degrees Celsius in some western parts of the country, the Met Office said.

“The impacts of extreme heat can be many and varied. It can have health consequences, especially for those who are particularly vulnerable, and it can impact infrastructure, including transport and energy, as well as the wider business community,” the Met Office said in a statement.

A record-breaking heatwave this month killed hundreds of people in Canada and the United States. Europe also has been unusually hot and flooding has devastated parts of Germany, Belgium and other countries.

(Reporting By Susanna Twidale; editing by Philippa Fletcher)

‘Worst’ of inflation seen likely this summer, easing in fall: U.S. official

WASHINGTON (Reuters) – U.S. consumer prices are likely to peak this summer and then begin to dissipate in the autumn, an official with the Biden administration said on Thursday, after news that the consumer price index increased again – by 0.6% – last month.

In the 12 months through May, the CPI accelerated 5.0%, hitting its biggest year-on-year increase since August 2008 and following a 4.2% rise in April. But the official, who asked not to be named, said that was largely due to a “base effect” given the low level of prices seen in the early phase of the COVID-19 pandemic.

The Biden administration remained convinced that the current spike in consumer prices would be transitory, and that assessment was shared by professional forecasters, investors, consumers and businesses, said the official.

“It’s most likely that it’s going to peak in the next few months. We’ll probably see the worst of it this summer, and (then) in the fall, things will probably start to get back to normal,” the official said.

Investors also clearly expected low inflation moving forward, given five-year forward positions, the official said.

“From a ‘put your money where your mouth is’ perspective, it’s pretty clear what investors think. And the same is true for surveys of consumers, surveys of business leaders, and professional forecasters. Everyone’s on the same page.”

The official rejected concerns voiced by Republican lawmakers that President Joe Biden’s proposed boost in spending on infrastructure, child care and community college would put further pressure on prices, given that the spending would only kick in around 2023 and then spread out over a decade.

“This is not piling stimulus upon stimulus,” the official said. “This is addressing a long-term problem over a longer duration. This is a decade-long plan to fix 40-year problems.”

(Reporting by Andrea Shalal; Editing by Andrea Ricci)

Republicans tell Biden tax hikes are a non-starter in recovery plan

By Jeff Mason and Jarrett Renshaw

WASHINGTON (Reuters) -Republican leaders told President Joe Biden on Wednesday they oppose any tax hikes to fund an economic recovery from the coronavirus pandemic, in a blow to the Democrat’s plans to spend trillions of dollars on U.S. infrastructure, education and childcare.

In their first White House meeting since Biden took office in January, Senate Republican leader Mitch McConnell and House of Representatives Republican leader Kevin McCarthy signaled a willingness to work with the president on infrastructure but drew the line at tax increases.

That is a setback to the White House’s efforts to have Congress approve a $2.25 trillion infrastructure bill and a $1.8 trillion education and childcare plan.

“You won’t find any Republicans who are gonna go raise taxes. I think that’s the worst thing you can do in this economy,” McCarthy said after the talks in the Oval Office. He cited rising gas prices as a reason not to back tax increases.

McConnell said Republicans were “not interested” in reopening a 2017 reform that cut taxes under former President Donald Trump.

“We both made that clear to the president. That’s our red line,” McConnell said.

Biden’s pandemic recovery plans have met with sharp resistance from Republicans in Congress, with disagreements over the price tag, scope and funding proposals. Those plans, and Biden’s intention to tax wealthy Americans and companies to cover the cost, are popular with voters from both parties.

Recent history does not augur well for a deal. No Republican voted for Biden’s $1.9 trillion COVID-19 relief plan that passed in March. House Majority Leader Steny Hoyer, a Democrat, said Tuesday that the Biden administration was “not going to wait a long time if we don’t see that agreement is possible.”

Asked in the Oval Office on Wednesday how he expected to come to a compromise, Biden quipped that he would just “snap my fingers.”

White House spokeswoman Jen Psaki said Biden did not seek to raise taxes on working Americans.

“His bottom line is that inaction is unacceptable, and that he is not going to raise taxes on the American people who are making less than $400,000 a year, but he’s open to a range of proposals,” she told a briefing.

Biden has said he wants to raise the U.S. corporate tax rate to between 25% and 28%, from 21%, to pay for badly needed infrastructure.

House Speaker Nancy Pelosi, a Democrat, said she felt more optimistic about prospects for a bipartisan infrastructure bill after the meeting, which she attended.

“We have a different set of values. But what we did agree in the meeting is: Let’s agree on what we’re trying to achieve. And then we can talk about how we pay for it. Let’s not lead with a disagreement. We’ll find a way because the public knows that this is necessary,” Pelosi told reporters.

CHENEY EXPULSION

McCarthy came to the White House talks shortly after leading his House Republican colleagues in expelling a member of their leadership, Liz Cheney, for rejecting Trump’s claims that Biden stole last year’s election from him through election fraud.

McCarthy, who has sought to placate Trump, cast her dismissal as necessary to unify Republicans and reclaim control of the House in 2022.

Psaki said the Republicans’ support for Trump’s false claims would not get in the way of Biden attempting to work with them.

“The president is no stranger to working with people who he disagrees with… or who he has massive fundamental disagreement with,” she said.

Congressional Democrats are giving Biden plenty of room to try to broker a deal, but they are preparing for the possibility of moving a massive spending bill along strictly party lines if Republicans do not join in negotiations, according to congressional and White House sources.

However, the Democrats in Congress may still struggle to retain the necessary support of enough of their own members to pass Biden’s spending proposals through both chambers, where they have slim majorities. They are betting the sheer volume of the spending measures will include enough attractive items to overcome any internal opposition, the sources told Reuters.

(Reporting by Jeff Mason and Jarrett Renshaw;Writing by Alistair BellEditing by Heather Timmons, Howard Goller and Rosalba O’Brien)

Biden willing to accept 25% corporate tax rate to fund spending programs

By Trevor Hunnicutt

LAKE CHARLES, La. (Reuters) -U.S. President Joe Biden said a corporate tax rate between 25% and 28% could help pay for badly needed infrastructure, suggesting he could accept a lower rate than what he has proposed in his search for Republican support for the funding.

“The way I can pay for this, is making sure that the largest companies don’t pay zero, and reducing the (2017 corporate) tax cut to between 25 and 28 percent, Biden said during a visit to Lake Charles, Louisiana.

In his $2.3 trillion infrastructure plan, the Democratic president initially proposed raising the corporate tax rate from 21% to 28%. Tax experts and congressional aides told Reuters in April that a 25% rate would be a likely compromise.

“What I’m proposing is badly needed” and will be paid for, Biden said.

“Trickle-down ain’t working very well,” he said, referring to the theory that helping businesses and the wealthy will benefit those further down the economic ladder. “We’ve got to build from the bottom up and the middle out.”

The U.S. corporate tax rate dropped to 21% from 35% after the 2017 tax cut pushed by then-President Donald Trump and his fellow Republicans, but many big U.S. companies pay much less.

Increasing what companies pay into the more than $4 trillion federal budget is an important part of Biden’s plan to restructure the U.S. economy to reduce inequality and to try to counter China’s rise.

Biden’s stop in Lake Charles was part of his “Getting America Back on Track Tour” to promote a $2.25 trillion infrastructure spending plan and a $1.8 billion education and childcare proposal.

His push to spend more federal money on schools, roads, job training and other public works, and to tax the wealthiest Americans and companies to pay for it, is popular with voters of both parties. But the plans face stiff opposition from Republican lawmakers.

The White House is betting trips like this will build public support for Biden and his spending proposals, even among Republican voters who backed Trump, who continues to hold enormous sway over his party.

Congressional Republicans oppose Biden’s proposed $2.25 trillion in infrastructure spending over a decade, saying the higher taxes that would be levied on corporations to fund it would cost jobs and slow the economy.

The U.S. economy has boomed under higher levels of corporate taxation, such as the 1960s and the 1990s.

In the closely divided Senate, Biden would need every Democratic vote if no Republicans support the bill. Biden said in Lake Charles he was meeting with Republicans in Congress to see “how much they’re willing to go for, what they think are the priorities, and what compromises” they can offer.

“I’m ready to compromise,” Biden said. “I’m not ready to have another period where America has another ‘Infrastructure Month’ and doesn’t change a damn thing.”

Some Republicans have offered a far smaller package: $568 billion, focused on roads, bridges, broadband access and drinking water improvements. However, much of that reflects money the federal government is already expected to spend for that infrastructure.

U.S. Senate Minority Leader Mitch McConnell predicted last week that Biden’s infrastructure and jobs plan would not get support from Republican lawmakers.

“I’m going to fight them every step of the way, because I think this is the wrong prescription for America,” McConnell said in an event in his home state of Kentucky last month.

(Reporting by Trevor Hunnicutt, Jarrett Renshaw and Doina Chiacu; Writing by Steve Holland; Editing by Heather Timmons and Jonathan Oatis)

China keen to seek benefits from pandemic, distressed U.S. assets: report

By Andrea Shalal

WASHINGTON (Reuters) – U.S. lawmakers and policymakers should be wary of China’s moves to target vulnerable U.S. assets and expand its market share in the wake of the global economic crisis triggered by the novel coronavirus, according to a study prepared for a U.S. trade group and released on Tuesday.

The Horizon Advisory report for the Alliance for American Manufacturing (AAM) said the Chinese Communist Party viewed the crisis as “a chance to expand its position in U.S. markets, supply chains and critical infrastructure.”

The consultancy said Beijing used the 2008-2009 global financial crisis to accelerate its “Go Out” industrial offensive in the United States, and was positioning to benefit from a likely spike in U.S. infrastructure spending.

“It’s a very sophisticated strategy,” AAM President Scott Paul said in an interview. “There’s a very legitimate debate that needs to occur about the appropriate role of Beijing in the U.S. economy, and there are reasons to be wary of including Chinese state-owned enterprises in our recovery effort.”

Paul said his lobby group was working with Democratic and Republican lawmakers to strengthen and expand provisions that earmark government funds for U.S. companies, and ensure they do not wind up in the hands of Chinese state-owned firms or investors.

The group was formed in 2007 by U.S. companies and the United Steelworkers to push for policies to expand U.S. manufacturing.

U.S. President Donald Trump has long pledged to bring manufacturing back from overseas, but the coronavirus pandemic has sparked a government-wide push to move U.S. production and supply chain dependency away from China.

Paul said the report showed China had identified “friendly” public officials and states including Kentucky, home of Senate Majority Leader Mitch McConnell, which has attracted increased Chinese investment in recent years.

Chinese acquisitions have come under greater U.S. scrutiny to determine their effect on national security, but takeovers could increase if the crisis left many distressed assets, as expected, he said.

(Reporting by Andrea Shalal; Editing by Richard Chang)

Thousands stranded, five killed, as heavy rain lashes south China

Residential houses and cars are seen submerged in floodwaters following heavy rainfall in Taihe county, Jian, Jiangxi province, China June 10, 2019. REUTERS/Stringer

SHANGHAI (Reuters) – Thousands of people have been stranded and at least five killed amid torrential rain throughout central and southern China, with authorities bracing themselves for at least another four days of downpours, state media reported on Tuesday.

The official China Daily said floods had wiped out 10,800 hectares of crops and destroyed hundreds of houses in the Jiangxi province by Monday, with a total of 1.4 million people affected and direct economic losses amounting to 2.65 billion yuan ($382.41 million).

In the region of Guangxi in the southwest, 20,000 households had their power cut and roads, bridges and other infrastructures were severely damaged, the China Daily said.

Rainfall in Jiangxi reached as much as 688 millimeters (27 inches), according to a notice by China’s meteorological administration. It said rain in parts of Jiangxi and Hunan had hit record highs for June.

The administration said rainstorms were expected to spread to Guangdong, Fujian, Jiangxi, Yunnan, Sichuan and Taiwan by Thursday. It also warned authorities to be on their guard against severe thunderstorms and the possibility of small rivers bursting their banks in coming days.

(Reporting by David Stanway; Editing by Paul Tait)

Trump points to Republican gains, broaches cooperation with Democrats

Democratic U.S. Senator Claire McCaskill addresses her supporters at her midterm election night party in St. Louis, Missouri, U.S. November 6, 2018. McCaskill conceded the election to Republican Josh Hawley. REUTERS/Sarah Conard

By Steve Holland and Jeff Mason

WASHINGTON (Reuters) – President Donald Trump on Wednesday portrayed the midterm election results as “an incredible day” for his Republicans despite a Democratic takeover of the U.S. House of Representatives that will lead to greater restraints on his administration.

At a White House news conference, Trump argued that Republicans beat historical odds in Tuesday’s elections, saying the party’s gains in the U.S. Senate outweighed its loss of the House.

He also mocked those Republican candidates who lost their seats after refusing to embrace him on the campaign trail, such as U.S. Representative Barbara Comstock of Virginia.

“It was a big day yesterday, an incredible day,” he said in what was only his third formal solo news conference at the White House. “Last night the R party defied history to expand our Senate majority while significantly beating expectations in the House.”

Republicans expanded their control of the U.S. Senate, knocking off at least three Democratic incumbents on Tuesday, following a divisive campaign marked by fierce clashes over race and immigration.

But they lost their majority in the House, a setback for the president after a campaign that became a referendum on his combative leadership.

The divided power in Congress combined with Trump’s expansive view of executive power could herald even deeper political polarization and legislative gridlock in Washington.

The Democrats will now head House committees that can investigate the president’s tax returns, possible business conflicts of interest and any links between his 2016 election campaign and Russia.

There may be some room, however, for Trump and Democrats to work together on issues with bipartisan support such as a package to improve infrastructure or protections against prescription drug price increases.

“It really could be a beautiful bipartisan situation,” Trump said.

He said Nancy Pelosi, who may be the next speaker of the House, had expressed to him in a phone call a desire to work together. But Trump doubted there would be much common ground if Democrats press investigations.

“You can’t do it simultaneously,” he said.

(Additional reporting by Susan Heavey, Steve Holland, Roberta Rampton, Patricia Zengerle, Amanda Bedcker and David Alexander in Washington and Megan Davies in New York; Writing by Alistair Bell and Steve Holland; Editing by Frances Kerry and Paul Simao)

Trump approves disaster aid for Hawaii’s volcano-stricken Big Island

Journalists and National Guard soldiers watch as lava erupts in Leilani Estates during ongoing eruptions of the Kilauea Volcano in Hawaii, U.S., June 9, 2018. REUTERS/Terray Sylvester

By Jolyn Rosa

HONOLULU (Reuters) – U.S. President Donald Trump on Thursday approved federal emergency housing aid and other relief for victims of the six-week-old Kilauea Volcano eruption on Hawaii’s Big Island, where hundreds of homes have been destroyed, state officials said.

The approval came a day after Governor David Ige formally requested assistance for an estimated 2,800 residents who have lost their homes to lava flows or were forced from their dwellings under evacuation orders since Kilauea rumbled back to life on May 3.

Lava destroys homes in the Kapoho area, east of Pahoa, during ongoing eruptions of the Kilauea Volcano in Hawaii, U.S., June 5, 2018.  REUTERS/Terray Sylvester

Lava destroys homes in the Kapoho area, east of Pahoa, during ongoing eruptions of the Kilauea Volcano in Hawaii, U.S., June 5, 2018. REUTERS/Terray Sylvester

Hawaii County Mayor Harry Kim has said that rivers of molten rock spewed from volcanic fissures at the foot of Kilauea have engulfed roughly 600 homes. The governor’s office put the number of residences destroyed at 455.

Either tally marks the greatest number of homes claimed over such a short period by Kilauea – or by any other volcano in Hawaii’s modern history – far surpassing the 215 structures consumed by lava in an earlier eruption cycle that began in 1983 and continued nearly nonstop for three decades, experts say.

The latest volcanic eruption also stands as the most destructive in the United States since at least the cataclysmic 1980 explosion of Mount St. Helens in Washington state that reduced hundreds of square miles to wasteland.

The geographical footprint of Kilauea’s current upheaval is much smaller, covering nearly 6,000 acres, or just over 9 square miles (2,400 hectares) of the Big Island in lava, an area roughly seven times Central Park in Manhattan.

No specific sum of money was sought by the governor for federal disaster aid, and no dollar figure was attached to the package Trump approved under the Individuals and Households Program, administered by the Federal Emergency Management Agency (FEMA).

Lava erupts in Leilani Estates during ongoing eruptions of the Kilauea Volcano in Hawaii, U.S., June 9, 2018. REUTERS/Terray Sylvester

Lava erupts in Leilani Estates during ongoing eruptions of the Kilauea Volcano in Hawaii, U.S., June 9, 2018. REUTERS/Terray Sylvester

The Honolulu Star-Advertiser newspaper reported this week that eligible homeowners and renters could get up to $34,000 each.

The program provides grants to displaced residents to secure temporary housing while their homes are repaired or rebuilt. Assistance can also be obtained for repair and replacement costs.

In addition to housing assistance, Trump approved relief from several other FEMA programs, including crisis counseling, unemployment benefits and legal aid.

Trump previously issued a major disaster declaration weeks ago authorizing money from FEMA public assistance grants for the County of Hawaii, the island’s local governing authority.

Residents will be able to register for assistance at a disaster recovery center that will open on Friday at the Kea‘au High School Gymnasium. The center will be jointly operated by Hawaii County, the State of Hawaii and FEMA.

NO END IN SIGHT

His expansion of FEMA assistance came as the Kilauea eruption entered its 43rd day on Thursday.

In addition to lava and toxic sulfur dioxide gas spewing from about two-dozen fissures on the eastern flank of the volcano, daily periodic explosions of ash from the crater at Kilauea’s summit have created a nuisance and health hazard to communities downwind.

Volcanic smog, or vog, carried aloft by the winds has hampered air quality for parts of the island and been detected as far away as the western Pacific island of Guam.

The volcanic activity at Kilauea’s summit has also triggered thousands of mostly small-scale earthquakes that have added to the jitters of residents living nearby and damaged facilities at the Hawaii Volcanoes National Park, the island’s biggest attraction. Most of the park remains closed.

A report from the governor accompanying his request for federal aid documented the larger toll taken on residents of the island’s volcano-stricken Puna district, including disruption of power, communications and drinking water infrastructure.

It cited an uptick in reports of residents “experiencing acute mental health effects of fear, anxiety and stress” as the crisis drags on with no end in sight.

With about one-fifth of Puna’s population displaced by the eruption, the disaster has created a “housing crisis in a rental market that was already severely constrained,” the report said.

In other economic impacts, the report cited losses of nearly $37 million in vacation rentals and $14 million from agriculture, including half of the state’s entire cut-flower industry and 80 percent of its papaya crop.

(Additonal reporting and writing by Steve Gorman in Los Angeles)

Houston still rebuilding from 2017 floods as new hurricane season arrives

A new home being constructed six feet above the ground to replace the one destroyed by Hurricane Harvey in 2017 is shown in the Meyerland neighborhood of Houston, Texas, May 16, 2018. Photo taken May 16, 2018. REUTERS/Ernest Scheyder

By Liz Hampton and Ernest Scheyder

HOUSTON (Reuters) – In an empty lot where Vincent Shields’ Houston home once stood, he points out properties whose owners were driven out after Hurricane Harvey inundated the region last summer.

“On this street there’s probably less than 30 percent occupancy,” said Shields, who tore down his house after the city ruled damage exceeded half its value and it would have to be elevated before being repaired. He and his wife moved into an apartment and began planning a new, higher home at the same location.

It has been roughly nine months since Hurricane Harvey dumped trillions of gallons of water on the U.S. Gulf Coast, killing 68 people and causing an estimated $125 billion in property damage.

Shields and some 25,000 Texas households are still displaced, according to the Federal Emergency Management Agency (FEMA). Nearly 80,000 homes across Texas had 18 inches of floodwater or more during Harvey.

In Houston, data on people still out of their homes and awaiting repairs are not available from the city. But U.S. Postal Service figures show 11,500 Houston homes became vacant between June 2017 and February 2018.

With the 2018 hurricane season beginning June 1, around 400 Houston households are still living in hotel rooms funded by FEMA, according to the agency’s latest data. Many others remain in temporary housing uncertain about their return home.

According to interviews with residents and neighborhood groups, many owners of flooded homes are still enmeshed in the emotionally fraught and expensive process of deciding whether to repair or elevate, or put their property up for sale.

Shields said the months since Harvey have been tough and fears that another major storm before the region fully recovers would be devastating.

“I can survive this once – health, wealth, physically – but I can’t do it again,” he said.

After three floods since 2014, local officials have added home-building restrictions and rules on rebuilding in flood-prone areas, giving owners of damaged homes costly new factors to consider.

Houston officials this year passed an ordinance requiring certain dwellings to be raised to the 500-year floodplain level plus two feet. Previously, only new homes had to start one foot above the 100-year level.

JACKED UP HOMES

The requirements have forced some owners to jack up existing homes to avoid the next flood.

Houston homes, typically built on slab foundations, can be mechanically raised for an average cost of $100,000 to $300,000 in a months-long project, said Wayne Fairley, a managing director at house elevating company Planet Three Elevation.

Fairley has tripled his workforce since Harvey to meet growing demand, he said. Subcontractors who once handled plumbing and electrical projects for the company now work for him full time.

“There were a lot of contracts signed post-Harvey,” said Fairley. About 5 to 10 percent of his clients are elevating their homes preemptively, and a large portion of his work is in Houston’s Meyerland neighborhood, which was hit by three major floods in recent years.

Nancy Wilson and her husband decided to tear down and build anew rather than spend the estimated $250,000 to raise and then remodel their 1950s home. The new house will be six feet higher than the old one, which got two feet of water during Harvey.

“I’m almost positive it will flood again,” said Wilson, a therapist, who hopes to move back by early next year. In the interim, the family is living a few miles away in a rental property.

“Honestly, I wish we were rebuilding higher,” said Wilson. “Six feet might not be high enough.”

STILL IN LIMBO

Gwen McGlory moved to west Houston’s Cinco Ranch neighborhood a decade ago for its good schools and gated subdivisions. Her house flooded after the city released water from a nearby reservoir to relieve stress on a dam, forcing her to find temporary housing.

Now, most mornings she drops her 14-year-old daughter off long before school has opened and picks her up hours after it has closed because the school system lacks funding to provide transportation from her current location.

“It’s concerning when I’m dropping her off at a dark school,” McGlory said, who is worried the transportation issues will continue into the next school year.

McGlory says she received $33,000 from FEMA after Harvey. Of that, $17,000 was earmarked for home repairs, despite bids from contractors pegging her damages closer to $70,000. The Red Cross worker recently was accepted to a rebuild and repair program run by a community group.

“I’m so overwhelmed. I am working and a single parent with two kids. I’ve never rebuilt a house before,” said McGlory, who had no flood insurance because her house was not in a floodplain.

While McGlory considered selling her property, an investor shortly after the storm offered $100,000 less than what she had paid for it.

Historically, home values in hard-hit areas can fall between 7 and 20 percent immediately after a flood, said Ed Wolff, president of real estate firm Beth Wolff Realtors and governmental affairs chair for the Houston Association of Realtors.

“You see a rebound after 18 to 24 months. As we get further away from the event the memories fade,” said Wolff, who decided to elevate his Meyerland home by almost six feet after Harvey and returned in early May.

The devastation of Harvey has pushed local officials and agencies to expand efforts to mitigate the impact of floods. Last year, county officials authorized $20 million to buy out homes that have routinely flooded.

The Harris County Flood Control District, which established its own buyout program in 1985, recently submitted a grant for state funding to buy homes damaged by Harvey. It has also focused on repairs to drainage infrastructure and removing debris from Harvey that could block waterways before the next hurricane.

Officials across the nation are becoming more aware of the dangers of urban flooding, which is aggravated by unbridled development, said Sam Brody, a professor in the Department of Marine Sciences and flooding expert at Texas A&M University in Galveston.

“Harvey exposed these underlying problems that cities such as Houston, Miami and Chicago face,” he said.

Texas is considering sweeping changes, including urging residents to buy flood insurance and raising the level of new homes, he said.

But the measures will take time to implement, Brody said. “There is a good likelihood we are going to get a major storm event before we are even partially recovered from this one.”

(Reporting by Liz Hampton and Ernest Scheyder in Houston and Jon Herskovitz in Austin; Editing by Gary McWilliams and Richard Chang)

U.S. spending bill tackles border, election security: source

FILE PHOTO: U.S. border patrol officers are pictured near a prototype for U.S. President Donald Trump's border wall with Mexico, behind the current border fence in this picture taken from the Mexican side of the border in Tijuana, Mexico

By Richard Cowan

WASHINGTON (Reuters) – A federal government spending deal being worked out in the U.S. Congress includes additional funding to boost border security, protect the upcoming elections in November and rebuild aging infrastructure, a source familiar with the negotiations said on Wednesday.

While the source said a final overall spending agreement had not been reached, other Republican and Democratic congressional aides have told Reuters that leaders plan to unveil their agreement on the $1.3 trillion spending bill later on Wednesday.

Lawmakers in the Republican-controlled Congress have until Friday night to reach a deal before a lapse would force federal agencies to suspend operations. The current plan would provide for government funding through Sept. 30, after a series of short-term funding measures implemented since last fall.

Republican leaders in the House and Senate said on Tuesday they were close to a deal and hoped to complete legislation by Friday as they worked to overcome divisions over several thorny issues such as President Donald Trump’s proposed border wall.

So far, the package provides $1.6 billion for some fencing along the U.S. border with Mexico and other technological border security efforts, the source said.

Trump had sought $25 billion for a full wall, but negotiations fell through to provide more money in exchange for protections for “Dreamers,” young adults who were brought illegally into the United States as children.

The spending plan also provides $307 million more than the Trump administration’s request for the FBI to counter Russian cyber attacks, and $380 million for U.S. states to improve their technology before November’s congressional election, according to the source.

U.S. intelligence agencies have concluded that Russia sought to meddle in the 2016 presidential election campaign, and intelligence chiefs said last month that Russia will seek to interfere in the midterm elections this year by using social media to spread propaganda and misleading reports. Russia has denied any interference.

The planned spending measure allocates $10 billion for spending on infrastructure such as highways, airports and railroads. It also includes money for the so-called Gateway rail tunnel connecting New York and New Jersey, the source said.

Trump has threatened to veto the bill if the Gateway project is included. While its funds remain, they are directed through the U.S. Department of Transportation, rather than provided directly, Politico reported.

Additionally, lawmakers’ added $2.8 billion to address opioid addiction, the source said.

One potential stumbling block includes gun-related provisions prompted by a mass shooting at a Florida high school on Feb. 14 that killed 17 students and faculty members. On Tuesday, as another shooting swept over a high school in Maryland, House Speaker Paul Ryan said lawmakers were still discussing a proposal to improve federal background checks for gun purchases.

Another issue tying up negotiations was tax treatment for grain co-ops versus corporate producers, according to Politico.

(Reporting by Richard Cowan, Susan Heavey, Lisa Lambert; Editing by Doina Chiacu, Bernadette Baum and Frances Kerry)