Fund Mexican wall or we’ll shut down government: Trump

The chances of a government shutdown in the fall grew larger after President Trump suggested on Tuesday he won't support a spending package that omits new funds for a Mexico border wall.

''Believe me, if we have to close down our government, we're building that wall,'' he said during a fiery rally in Phoenix.

''Build that wall,'' he said. ''Now, the obstructionist Democrats would like us not to do it. But believe me, if we have to close down our government, we're building that wall.''

US stocks closed lower on Wednesday as investors grappled with Trump's threat. Stocks managed to briefly pare losses after comments from US House Speaker Paul Ryan calling a government shutdown unnecessary. Yet that was not enough to calm nerves as the deadline to approve spending measures draws near and a fight looms over raising the cap on government borrowing.

Trump's shutdown threat is just the latest headache for the Republicans, who are already scrambling to mend deep internal divisions among rank-and-file members, manage disintegrating relations between Trump and Senate Majority Leader Mitch McConnell (R-Ky) and contain the fallout from the president's ambivalent response to the deadly violence at a recent white supremacist rally in Charlottesville, Va.

Increasingly pressured to demonstrate their governing ability, GOP leaders have insisted they'll pass their spending bills in time to keep the government running beyond 1 October, when funding expires. And Speaker Paul Ryan (R-Wis) on Wednesday played down Trump's suggestion that border wall funding is worth a shutdown.

''I don't think a government shutdown is necessary, and I don't think most people want to see a government shutdown, ourselves included,'' Ryan said during a visit to an Intel facility in Oregon.

Of Trump's threat, Ryan said the president is merely ''employing a strategy that he thinks is effective for him''.

Congress will have about 12 working days when it returns from its summer recess on 5 September to raise the debt ceiling before the US Treasury exhausts the last of its options to remain current on all of the federal government's obligations.

Credit ratings agency Fitch Ratings said a failure to raise the ceiling in a timely manner would prompt it to review its rating on US sovereign debt, "with potentially negative implications".

Trump is now at odds not only with Democrats, who cemented their objections to funding the wall Wednesday, but also with Republicans, who must reconcile his brash rhetoric with the governing realities of Congress.

Lawmakers chided the president for the attacks he fired off during a campaign-style rally in Phoenix on Tuesday evening - including indirect references to Arizona's two Republican senators, Jeff Flake and John McCain.

''It's entirely counterproductive for the president to be picking fights with Republican senators who he will need for important agenda items that they both agree on,'' Rep Charlie Dent (R-Pa) told The New York Times. ''Does he think that Democratic senators will be more cooperative than John McCain and Jeff Flake and Susan Collins? It doesn't seem to make any sense.''

Republicans face a range of high-stakes deadlines when they return to Washington after Labour Day on Thursday: to extend funding for government agencies, raise the nation's borrowing limit, and reauthorize programmes for flood insurance and children's health. GOP leaders also hope to begin an ambitious effort to rewrite the federal tax code in a bid to rescue their foundering legislative agenda.

''So I don't think anyone is interested in having a shutdown,'' Ryan said at a tax policy event in Oregon. ''I don't think it's in our interest to do so.''

Trump and Senate Majority Leader Mitch McConnell (R-Ky) moved to dispel reports of a relationship that has frayed through mutual frustrations - McConnell's exasperation with Trump's response to deadly violence at a recent white-nationalist rally in Virginia, and Trump's annoyance about a stalled congressional agenda.

Both men issued statements Wednesday saying they are dedicated to working together on Republican priorities.

White House press secretary Sarah Huckabee Sanders said that the two ''remain united on many shared priorities, including middle-class tax relief, strengthening the military, constructing a southern border wall, and other important issues,'' and that they plan to meet when the congressional recess ends after Labor Day.

The gesture of detente came after a New York Times report highlighted their rocky relationship and after Trump's salvo in Phoenix - an ultimatum aimed squarely at Capitol Hill.

At other points during the Phoenix rally, Trump urged McConnell to ditch the long-standing Senate rules that give the minority party the ability to block major bills.

He hinted that he would pardon former Arizona county sheriff Joe Arpaio, a divisive figure who has been found in criminal contempt by a federal judge. And without naming them, he referred to the opposition he has faced from Flake and McCain.

''I will not mention any names - very presidential, isn't it?'' he said, only to take aim at Flake as ''weak on crime & border'' in a tweet hours later.

The shutdown threat is a response to the leverage granted to the minority party in the Senate. Although Republicans control the House, the Senate and the White House, Democrats have enough votes in the Senate to filibuster any spending bill, giving them the power to make demands regarding what is and isn't included in a funding package.