Partial Federal Shutdown Carries Into 2019 With No End in Sight

(Bloomberg) -- The partial U.S. government shutdown extended into the new year Tuesday with no signs of progress toward a spending deal between Congress and President Donald Trump as the effects of the 11-day-old stalemate become increasingly visible.

Smithsonian Institution museums and the National Zoo in Washington are set to close Wednesday for lack of funds. The Federal Communications Commission will suspend most operations Thursday, no longer taking consumer complaints and halting review of proposed mergers such as wireless provider T-Mobile US Inc.’s $26.5 billion bid for Sprint Corp.

The American Federation of Government Employees said it sued the government Monday on behalf of more than 400,000 federal employees who are having to work without pay. Government employees who worked without pay receive checks automatically as soon as a shutdown is resolved, while Congress typically also votes to pay those who were furloughed. But the union says it won a court ruling after the 2013 shutdown that federal law requires workers to be paid on time.

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 two bills to fund the federal departments that are closed, without providing extra money for Trump’s border wall.

One measure would reopen eight departments through September 2019 and the other would temporarily reopen the Department of Homeland Security, which is at the center of the fight over border wall funding, through Feb. 8.

But the Senate doesn’t plan to rubber-stamp the House plan.

"It’s simple: The Senate is not going to send something to the president that he won’t sign," said Don Stewart, a spokesman for Senate Majority Leader Mitch McConnell.

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:

• The Senate and House held brief sessions Monday without taking any votes. Both chambers also will hold pro forma sessions Wednesday, with no votes planned.
• Trump tweeted on Monday, "I campaigned on Border Security, which you cannot have without a strong and powerful Wall."

Next Steps:

• 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, Alyza Sebenius and Anna Edgerton.

To contact the reporters on this story: Erik Wasson in Washington at ewasson@bloomberg.net;Todd Shields in Washington at tshields3@bloomberg.net

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

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