Republicans, Democrats Far Apart on Deal as Shutdown Clock Ticks

(Bloomberg) -- Republicans and Democrats in Congress are once again far apart on a government spending bill with just days to go before a partial shutdown.

The next deadline is Jan. 19, and after Republican leaders met with President Donald Trump and cabinet officials over the weekend at Camp David there was no indication either side had budged on some of the policy disputes -- most prominently immigration -- that are tied up in the debate over funding.

This week will be crucial in terms of reaching bipartisan deals, with the House and Senate needing the following week to vote whatever bill emerges from negotiations.

The government has been running on autopilot since the fiscal year began Oct. 1, relying on a series of short-term measures that have kept the government running at last year’s funding levels. The tangle of other issues and the looming deadline makes yet another stopgap bill almost inevitable.

A key test will be whether Democrats and Republicans can agree to add other items to the new stopgap, including a two-year agreement to raise budget caps, changes to immigration laws, funding for natural disasters, and health-care law revisions. Unlike the tax cuts enacted by the GOP in December, Republicans will need votes from Democrats, and significant differences remain in each area, particularly immigration.

Shutdown Threat

“If the Democrats want to shut down the government because they can’t get amnesty for illegal immigrants, then they’re going to have to defend those actions to the American people,” Republican Senator Tom Cotton of Arkansas said Sunday on ABC’s “This Week” program.

Read more: What Shuts Down During a U.S. Government Shutdown

If both parties can agree this week on raising budget limits, Congress may be able to pass a short-term spending bill, known as a continuing resolution, said Muftiah McCartin, a former spending panel staff member for House Democrats and now at Covington & Burling LLP.

“If they don’t get a deal, will the Democrats allow another CR to go forward? I’d kind of be surprised,” McCartin said.

Immigration Debate

The most difficult issue is immigration, and progress likely awaits a mid-week meeting of Democratic and Republican congressional leaders with Trump.

All sides agree something should be done to shield from deportation about 800,000 undocumented immigrants brought to the U.S. as children, known as dreamers. Trump announced in September that an Obama-era program that shielded them, known as Deferred Action for Childhood Arrivals would end in early March, and he urged lawmakers to come to an agreement on how their status should be handled.

Senate Majority Leader Mitch McConnell says he wants to see immigration legislation move separately this month if a deal is reached. Democrats want deportation protections as part of the broader spending bill, and are willing to pair it with what party leaders call “reasonable” GOP border security provisions that don’t include a wall.

Trump has said he’s willing to address the dreamers issue in exchange for money for a U.S.-Mexico border wall, an end to family immigration preferences and a visa lottery intended to promote diversity. But the standoff has been deepening.

“We want the wall,” Trump said Saturday at Camp David. “The wall is going to happen or we’re not going to have DACA.”

Drawing a Line

The second-ranking Senate Democrat, Dick Durbin of Illinois, said the administration is pushing both sides apart with a new Department of Homeland Security proposal for $18 billion over 10 years to build the border wall as part of any deal.

“President Trump has said he may need a good government shutdown to get his wall,” Durbin said Friday the Homeland Security Department delivered the figure to lawmakers. “With this demand, he seems to be heading in that direction.”

Democrats are willing to use their leverage on the spending bill to force the immigration issue.

“They need Democratic votes to pass anything,” Senate Minority Leader Chuck Schumer of New York said last week -- the same week Democrats benefited when Alabama Senator Doug Jones was sworn in, shrinking the Republican Senate majority to just 51-49.

Republican Senator Thom Tillis of North Carolina said in an interview that any deal is likely to include the deportation shield and a pathway to citizenship for the young immigrants, as well as limits on their ability to bring relatives to this country. That limitation could also apply to other immigrants, he said.

Negotiators also could find a compromise by giving the Department of Homeland Security discretion to build a wall if necessary, or by agreeing to authorize a border wall without paying for it now.

Budget Caps

The budget caps are an issue both sides say they want to resolve in a two-year deal to avoid another spending standoff next year. Lawmakers agree that defense spending should be raised above the $549 billion cap created by a 2011 law and that domestic spending can be raised above the $516 billion limit. 

Three areas are in dispute: how much to raise each cap, how to pay for the increases, and which programs should benefit. The last part is often left to the appropriations committees, but this year lawmakers are looking to justify spending increases with specific needs.

Democrats want equal increases for defense and non-defense programs.

"I am not quite sure why Senate Majority Leader McConnell is pushing the Senate toward a government shutdown by his insistence on ending the longstanding bipartisan budget agreements over parity for defense and non-defense spending," independent Senator Bernie Sanders of Vermont, the top member of the Democratic caucus on the Budget Committee, said Friday.

On health care, Democrats are increasing their demands for changes to Obamacare now that the tax-cut law will repeal the requirement that most Americans have health insurance or pay a penalty. They haven’t yet revealed the details of what they want in legislation.

Open enrollment in Obamacare plans for this year went fairly well after experts feared lower signups. One reason is that many people were able to find low-cost plans because the government was required to make up for Trump’s decision to withhold cost-sharing subsidies.

As a result, a bipartisan bill negotiated by Senators Lamar Alexander, a Tennessee Republican, and Patty Murray, a Washington Democrat, to restore the subsidies is losing steam. Democrats fear restoring the subsidies could wind up forcing some lower-income people to pay more and push them out of the insurance market.

Two elements of a broader deal are seen as easiest: natural-disaster aid and extending the Children’s Health Insurance Program. The House has passed an $81 billion package to help recover from hurricanes in Texas, Florida and Puerto Rico and wildfires in California. Democrats are seeking more relief for Puerto Rico.

All sides agree on reauthorizing the children’s insurance program. The question of how to fund it became easier to resolve Friday when a new analysis from the Congressional Budget Office lowered the cost from $8 billion to less than $1 billion.

Still unclear is how Congress will extend a federal law authorizing foreign surveillance, which expires Jan. 19. Some lawmakers are demanding stricter limits on when officials can, without court warrants, access Americans’ communications incidentally caught in the surveillance. The Trump administration wants to preserve the program as it is. The House plans to vote on a stand-alone Republican bill next week.

--With assistance from Mark Niquette and Margaret Talev

To contact the reporters on this story: Erik Wasson in Washington at ewasson@bloomberg.net, Laura Litvan in Washington at llitvan@bloomberg.net, Anna Edgerton in Washington at aedgerton@bloomberg.net.

To contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, Laurie Asséo

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