Trump’s Border Wall Demand Raises the Prospect of Another Shutdown

(Bloomberg) -- Congress returns to work this week with Democrats and Republicans promising to work together to avert a partial government shutdown and pass a handful of other bills, though President Donald Trump’s demand to fund his border wall could blow up their plans.

Eyeing a combative 2019 -- when Democrats take control of the House and an expanded GOP majority rules the Senate -- lawmakers are looking to pass the last needed spending bills, as well as major farm legislation, an extension of expiring tax credits and a short list of other items.

Congress returns to Washington Tuesday for a post-election lame duck session.

Yet Trump hasn’t dropped his demand to fund a wall at the Mexican border, fuel for a potential third government shutdown since he took office.

Trump’s Border Wall Demand Raises the Prospect of Another Shutdown

Trump slightly toned down his rhetoric on the wall at a news conference the day after last week’s congressional elections. When asked if he would insist on wall funding in exchange for signing legislation to finance several key government agencies, he told reporters “not necessarily.” But he wouldn’t take a shutdown off the table.

“We need the wall,” he said. “Many Democrats know we need the wall. And we’re just going to have to see what happens. I mean, I will be fighting for it.”

Russia Sanctions

The matter is probably the most contentious item among priorities during the final weeks that the Republicans will control both chambers. Other weighty issues, including proposed sanctions on Russia and an overhaul of federal sentencing guidelines, may get pushed into next year. And House conservatives who pine for a last round of tax cuts before Democrats take over the chamber concede there isn’t much appetite in the Senate.

Trump’s Border Wall Demand Raises the Prospect of Another Shutdown

Speaking to reporters on Friday, Senate Majority Leader Mitch McConnell wasn’t spoiling for any fights. He said his top agenda items for the lame duck session are the spending bills, farm subsidy legislation and confirming more federal judges.

He underscored that Trump’s goals for a border wall must attract some Democratic votes in the Senate, which is controlled 51-49 by the GOP. It will take 60 votes to advance the year-end spending bills.

“We’ll certainly try to help achieve what he’d like to do with the wall and border security,” McConnell said. “That will obviously have to be done on a bipartisan basis.”

Avoiding a Shutdown

The border wall question is tied to Congress’s need to finance the government beyond Dec. 7, when stopgap spending expires for several major agencies including the Department of Homeland Security, the Internal Revenue Service and the National Park Service. Those agencies and some others would shut down if an agreement can’t be reached.

The largest agencies already are funded for the full fiscal year, including Defense, Veterans Affairs and Health and Human Services.

Senate Democrats and Republicans have proposed giving Trump $1.6 billion in border security funding. House Republicans and the White House are seeking $5 billion, down from earlier demands of $23 billion. Congressional staff say they could shift money around to accommodate the extra border funding without cutting funds for Democratic priorities.

Trump’s Border Wall Demand Raises the Prospect of Another Shutdown

Democrats are betting that Trump will back down. Senate Minority Leader Chuck Schumer of New York told reporters last week that both chambers “have come to agreements without any muss or fuss” on spending bills this year. He urged the president to stay on the sidelines on border security, saying lawmakers already are on track to resolve that on their own.

The top Democrat on the Senate Appropriations Committee told reporters Monday that new border security funds must be used for fencing rather than a 30-foot concrete wall as Trump has advocated. Senator Patrick Leahy of Vermont said money for the border can’t be shifted from other domestic priorities, and that for both sides to cut a year-end funding deal the GOP must drop “poison pill” policy riders and adequately fund disaster relief for recent hurricanes and wildfires.

"I’m perfectly willing to look at it," Leahy said of the border security funding. "I would want to see where it is being spent."

Self-Driving Cars

The spending bills could become vehicles to win passage of other important measures, including legislation intended to encourage the use of self-driving cars. A Senate bill stalled amid opposition from some Democrats, including California’s Dianne Feinstein, and resistance from trial lawyers over legal protections for consumers. Backers including Senate Commerce Committee Chairman John Thune, a South Dakota Republican, and Senator Gary Peters, a Michigan Democrat, are pushing for a consensus.

The House passed a self-driving car bill in 2017 with bipartisan support. The two bills are different in key ways but have similar concepts. Both aim to support the use of self-driving automobiles and would set a timeline for regulators to write rules for them. The measures would pre-empt state and local rules on design, performance and safety. While backed by industry, the bills are opposed by safety advocates who cite oversight shortcomings.

On the farm bill, lawmakers are working on a five-year measure to reauthorize farm subsidies, crop insurance and the food stamp program. Without a deal, farmers who are already struggling under new Chinese tariffs amid Trump’s trade war would begin to feel the effects of lost subsidies beginning in January.

The House and Senate have passed largely similar bills, but they disagree over food stamps.
The House, backed by Trump, would shift some food stamp money from benefits to workforce training, while raising from 49 to 59 the age at which able-bodied adults must work or receive training. The House also would add work requirements for households with children age 6 and older.

‘A Little Tricky’

Speaking Friday to reporters in his home state of Kentucky, McConnell said getting a compromise will be “a little tricky” but that both sides will “get there.”

Trump’s Border Wall Demand Raises the Prospect of Another Shutdown

Senator Chuck Grassley of Iowa, a senior Republican on the Agriculture Committee, said that if all else fails Congress will extend the current law.

“If the White House is willing to back off of food stamps, we’ll have a farm bill before Christmas,” Grassley said. “If not, there will be an extension of the current bill.”

On taxes, Congress faces pressure to extend more than two dozen credits and deductions that have lapsed or are nearing expiration. Negotiations will hinge on the cost of the package and balancing the tax breaks between red and blue states.

Biofuel credits -- favored by farm state Republicans -- and a $7,500 credit for electric-car buyers -- backed by Democrats -- are among the benefits up for renewal. The expiring tax breaks also benefit racehorse owners, miners and railroad companies.

Republicans also want to fix a mistake in the 2017 tax overhaul that forces restaurants and retailers to wait almost four decades to recoup the full cost of renovations. Drafters had intended to let them write off the costs immediately.

Democrats, who unanimously opposed the tax cut, are reluctant to help the GOP rectify its errors. But Schumer said he could support tax-code fixes if they also include benefits favored by Democrats such as larger credits for low-income workers or affordable housing.

Criminal Sentencing

Congress also may consider revising criminal sentencing laws, although GOP leaders say that may be pushed into 2019 without quick signs of agreement.

The House in May passed a prison measure providing $50 million annually through 2023 for programs aimed at curbing recidivism. But the bill has been held up in the Senate, where Grassley, the Judiciary Committee chairman, wants to include sentencing changes his panel approved in February.

Grassley wants to give judges more leeway in sentencing, reduce mandatory minimum terms for some low-level nonviolent offenses and retroactively apply a federal law that reduces sentence disparities between crack and powder cocaine offenses.

Meanwhile, additional sanctions on Russia could be on the agenda, but also may be punted into 2019.

Democratic Senator Chris Van Hollen of Maryland is pushing to impose stiff sanctions on foreign governments such as Russia that interfere in future U.S. elections. He said that if the bill slips into 2019, he’s confident the new House Democratic majority will act, creating momentum to get a bill to Trump’s desk.

©2018 Bloomberg L.P.