U.S. Enters New Year’s Eve on 10th Day of Partial Government Shutdown

(Bloomberg) -- A turbulent year is coming to a close in Washington with the 10th day of a partial federal government shutdown and no signs of progress toward a spending deal that President Donald Trump would be willing to sign.

Nancy Pelosi is set to reclaim the speaker's gavel on Thursday, when Democrats take control of the House of Representatives. Her first order of business is expected to be passing a bill to fund the federal departments that are closed, without providing extra resources for Trump's border wall.

It's unlikely that Senate Majority Leader Mitch McConnell will put the House bill on the Senate floor because he's said that his chamber will only vote on a deal that all congressional leaders and the president support.

Pelosi and Senate Minority Leader Chuck Schumer say they won't consider offers that Trump hasn't endorsed, after he unexpectedly rejected a spending bill that passed the Senate unanimously before the Dec. 21 fiscal deadline. The impasse -- and the collateral damage from a partially shuttered federal government -- begins the new era of divided government in which Democrats must balance ambitions for a bipartisan agenda with oversight of a president they hope to unseat in 2020.

“Democrats are united against the President's immoral, ineffective and expensive wall – the wall that he specifically promised that Mexico would pay for,” Drew Hammill, a Pelosi spokesman, said in an emailed statement. “Democrats have made it clear that, given that the President has changed his position so many times, we would not consider any offers from the White House that the President has not publicly endorsed.”

There was little movement over the weekend, aside from a handful of tweets from Trump. Republicans and Democrats said the two sides remain far apart. Richard Shelby, the Alabama Republican who chairs the Senate Appropriations Committee, urged party leaders to come back to the table to find a way forward.

“Our negotiations are at an impasse,” Shelby said on CBS's “Face the Nation” on Sunday.

As the partial shutdown drags on and federal workers feel the pinch, some lawmakers have suggested that funds for a physical barrier on the border could be coupled with other immigration measures favored by Democrats, such as legal status for so-called Dreamers, young immigrants brought to the U.S. illegally as children. South Carolina Senator Lindsey Graham on Sunday cited several immigration proposals that previously failed to get sufficient Republican support as a possible starting place.

“President Trump is not going to walk away from this fight without border security funding -- money for the wall, for lack of a better way of saying it,” Graham said on CNN. “I'm not asking anybody to do something new. I'm just asking people to sit down and rearrange the deal that was offered before.”

Graham told reporters Sunday he discussed a broader immigration proposal with Trump during lunch and “there's a deal to be had.” A senior Democratic aide said in response that Trump hasn't weighed in publicly on Graham's latest suggestion, adding that the president appears unwilling to find a way out of the shutdown he championed. The White House didn't immediately respond to a request for comment.

Bipartisan compromise will be a requirement for any legislation in the next two years. The first test of the divided government will be to find a face-saving deal that allows Trump to claim victory to his border-hawk voter base, without Pelosi ceding ground that would alienate left-leaning factions in her new Democratic majority.

Latest Developments:

Several White House officials suggested Sunday that the definition of Trump's border wall could be flexible, including broader security measures. Senior adviser Kellyanne Conway accused Democrats of fixating on Trump's description of the wall, calling the impasse “a silly semantic argument.”
Outgoing chief of staff John Kelly told the Los Angeles Times that the border structure won't actually be a wall, but rather Trump is “tended toward steel slats” in some areas supplemented by technology. Dozens of tweets notwithstanding, Trump backed away the idea of a concrete wall ages ago, Kelly said.
Representative Hakeem Jeffries of New York, the incoming Democratic caucus chairman, said on ABC that Democrats will not help fund an “ineffective, Medieval border wall that is a 5th century solution to a 21st century problem.”
Trump blamed the deaths of two immigrant children in U.S. custody on Democrats; Kelly blamed chaos at the border on former Attorney General Jeff Sessions.

Next Steps:

The Senate and House are set to hold brief sessions Monday but no votes are scheduled. Lawmakers will be given 24 hours' notice if there's a breakthrough that would require a vote.
The 115th Congress ends Thursday, when the session beginning at noon marks the start of the 116th. Pelosi is expected to secure enough Democratic votes to become speaker for a second time.
If the shutdown standoff continues, all workers in the departments and agencies affected by the closing will miss their next paycheck on Jan. 11.

Key Impacts:

The shutdown, which began Dec. 22, affects nine of the 15 federal departments, dozens of agencies, and hundreds of thousands of workers.
Among the departments without funding are: Justice, Homeland Security, Interior and Treasury. Independent agencies, including the Securities and Exchange Commission, are also affected.
The departments whose funding lapsed represent about a quarter of the $1.24 trillion in government discretionary spending for fiscal year 2019.
An estimated 400,000 federal employees are working without pay and 350,000 are furloughed, according to a congressional Democratic aide.
Federal employees working without pay and those now furloughed got their Dec. 28 paychecks under a decision by the White House budget office because pay reflects work before Dec. 21.
The remaining parts of the government, including the Defense Department and the Departments of Labor and Health and Human Services, were already funded and won't be affected by the shutdown, nor will mandatory entitlement programs such as Medicare payments.

--With assistance from Ben Brody, Erik Wasson and Alyza Sebenius.

To contact the reporter on this story: Anna Edgerton in Washington at aedgerton@bloomberg.net

To contact the editors responsible for this story: Kevin Whitelaw at kwhitelaw@bloomberg.net, Ros Krasny, Mark Niquette