Why a Government Shutdown Might Actually Happen This Year

By Yuval Rosenberg and Michael Rainey Why a Government Shutdown Might Actually Happen This Time Congress has 11 days to avoid a government shutdown, with the current short-term funding bill expiring on Friday, January 19. Lawmakers are expected to pass a fourth continuing resolution for the fiscal year, which began last October, buying another few weeks for Congress and the Trump administration to reach an agreement on the 2018 budget. Once we move beyond short-term funding, though, the picture is less clear, and some analysts see a rising threat of a shutdown. Last week the White House asked Congress for $18 billion over 10 years to pay for a border wall with Mexico, an idea Democrats have repeatedly rejected. President Trump has said funding for the wall must be part of any deal that is made to protect the children of illegal immigrants who could be deported once the Deferred Action for Childhood Arrivals program expires in March. In response to the administration’s request, Sen. Richard J. Durbin (D-IL) warned, “President Trump has said he may need a good government shutdown to get his wall. With this demand, he seems to be heading in that direction.” On Monday, the White House downplayed the risk, with White House Budget Director Mick Mulvaney saying he doesn’t think the government will have to close as a result of a budget showdown (though not without blaming his opponents for that eventuality, just in case). “There are some folks in the Democratic Party who are interested in shutting the government down over DACA. Again, I do not think it’s going to come to that,” he told Fox News. What the Analysts Say Analysts agree with this assessment, at least in the short term. “We think the chances of a short-term extension passing are around 50% while a deal on a spending bill that covers the rest of the fiscal year (ending on September 30) is around 30% and the chances of a government shutdown are around 20%,” KBW's Brian Gardner said in a note to clients Monday. Cowen Research Group’s Chris Krueger echoed the short-term sentiment, but offered a more pessimistic long-term prognosis: “Government shutdown next Friday unlikely, though a shutdown this year over DACA/The Wall likely question of when, not if.” Budget expert Stan Collender, writing in [Forbes]( offered an even more pessimistic outlook, suggesting that the January 19 deadline didn’t make sense in the first place given the differences that need to be resolved — and that a short-term funding resolution may not work out. “The idea that congressional Republicans and Democrats and the Trump administration would settle all of their differences and adopt the final fiscal 2018 appropriations by the current deadline of January 19 was always...in technical federal budget terminology...’total B.S.,’” he wrote. But while another continuing resolution would be the normal course of action, Trump might opt to veto a short-term spending bill. Why would the president make such a move? “Government shutdowns typically happen because of emotional issues rather than substantive differences and, in what should be considered an understatement, Trump is dealing with multiple issues right now that qualify as emotional,” Collender argues. Collender concludes that a funding showdown driven by Trump’s emotional appeal to his base could be hard to resolve, opening the door to a shutdown that “could last weeks rather than days.” [Share]( [Tweet]( [Forward]( The 3 Big Issues on the GOP’s 2018 Agenda The top of the GOP’s to-do list for 2018 looks just a bit clearer after President Trump, administration officials and congressional Republican leaders spent two days hashing out their plans at Camp David this weekend. Here’s what you need to know to be, like, really smart about the policy issues that might be on the agenda before the November elections. Infrastructure: A plan to fund roads, bridges and other infrastructure investment is likely to be the White House’s next big legislative push — but President Trump is already complicating those efforts. [The Washington Post's Josh Dawsey]( reports that the president “expressed misgivings” about his administration’s infrastructure plans in meetings at Camp David. Trump reportedly questioned the effectiveness of public-private partnerships for major building projects, a key element of his plan to boost infrastructure investment by $1 trillion. It’s [not the first time]( Trump has argued that such partnerships simply don’t work — but such arrangements were nevertheless part of a detailed proposal presented by White House economic adviser Gary Cohn at Camp David on Saturday. Cohn again laid out a plan to have the federal government spend $200 billion on infrastructure in the hope that it could spur $800 billion or more in private, state and local spending. “The seemingly contradictory statements, made within 24 hours of each other, show the uncertainty of the administration's approach to its top legislative priority in 2018,” Dawsey wrote, adding that some administration aides who have worked on infrastructure plans for months have been “infuriated and surprised” by Trump’s talking down public-private partnerships. A White House spokesperson provided the Post with this statement: “The President’s infrastructure vision is very clear and is based around 2 main goals: leveraging federal funds as efficiently as possible in order to generate over $1 trillion in infrastructure investment and expediting the burdensome and lengthy permitting process.” Immigration: Trump on Saturday held out hope that Republicans could work out a deal with Democrats to protect hundreds of thousands of young people who were brought to the U.S. illegally as children. But his demand for funding for the border wall and revamping the legal immigration system angered Democrats. Progress here is likely to be sloooow. Welfare reform: Trump on Saturday appeared to [back away]( from prioritizing changes to anti-poverty programs. The president himself had brought up the issue in recent weeks, and it’s a top priority for House Speaker Paul Ryan and other House Republicans. But rounding up the necessary votes would likely be difficult, especially in a narrowly divided Senate. “It’s a subject that’s very dear to our heart,” Trump said Saturday. “We’ll try and do something in a bipartisan way. Otherwise, we’ll be holding it for a little bit later.” So maybe 2019? What do you think? Are we heading for Oprah vs. Trump in 2020? Send us your tips, feedback and political prognostications. Email Yuval Rosenberg at yrosenberg@thefiscaltimes.com. Follow us on Twitter [@yuvalrosenberg]( and [@TheFiscalTimes](. Tweet of the Day From Marc Goldwein, senior vice president and senior policy director for the Committee for a Responsible Federal Budget. [Click through]( to see the charts in full. Quote of the Day Grover Norquist, president of Americans for Tax Reform, on the problem with the Republicans’ framing of welfare reform, via the [Daily Caller]( “I’m not sure from talking to people that they have actually focused sufficiently on this as welfare reform. They still keep talking about this as entitlement reform, which is something you do to make the budget work thirty years from now — which doesn’t do much for the time being.” Chart of the Day We're witnessing a historic rise in party-line votes in Congress, as this slide from a [PowerPoint deck]( by Republican lobbyist Bruce Mehlman shows (h/t [The Washington Post](. CHIP Renewal Will Cost Less Than Expected The Congressional Budget Office said Friday that the cost of extending the Children’s Health Insurance Program would be $800 million over five years, far less than the $8.3 billion cited previously. Funding for the program, which covers about 9 million children, has been in limbo since the fall. Vox’s Sarah Kliff offered an explanation for the surprising turn of events: “The mechanics are wonky, but this is the gist: Repealing the mandate increases ACA premiums; because ACA coverage is the alternative to CHIP for many kids, it would cost the federal government more if CHIP were to end and those children moved to the ACA markets. That makes extending CHIP cheaper, from the government's point of view.” News - [White House: Trump Would 'Welcome' Chance to Run Against Oprah]( – The Hill - [Why Trump and Republicans Are Suddenly Talking Up Bipartisanship]( – Washington Post - [Why Trump’s Infrastructure Push Might Stall Again]( – Bloomberg - [Sen. Chris Murphy: Infrastructure Now ‘Tall Order’ Thanks To GOP Tax Cuts]( – WSHU - [What Republicans Mean When They Talk About Welfare Reform]( – Reuters - [Medical Research? Congress Cheers. Medical Care? Congress Brawls]( – New York Times - [American Kids Are 70 Percent More Likely to Die Before Adulthood Than Kids in Other Rich Countries]( – Vox - [US Spent a Record $306 Billion on Natural Disasters in 2017]( – AP - [Buffett's Berkshire Stands to Gain $37 Billion Windfall from Tax Plan]( – CNBC - [Big Oil Finds Hurdles Buried in Trump’s ‘America-First’ Tax Plan]( – Bloomberg - [$5B Tax Break to Land Amazon for New Jersey Gets Quick OK from Lawmakers]( – NJ.com - [Jack Nicklaus, Davis Love III Helped Save PGA Tour's Tax-Exempt Status]( – Golfweek Views - [Why States May Get Away with Creative Income Tax Maneuvers]( – Daniel Hemel, The Conversation - [Trump Passed Up a Huge Opportunity to Give Americans an Economic Boost]( – Pedro Nicolaci da Costa, Business Insider - [What Happens When the Tax-Plan Promises Aren’t Kept?]( – Jennifer Rubin, Washington Post - [‘Welfare Reform’ Is the Same Racist Dog Whistle It Always Was]( – Jared Bernstein, Washington Post - [US Needs a Well-Designed Infrastructure Plan]( – Mohamed A. El-Erian, Bloomberg View - [It’s Time the Supreme Court Makes Sales Tax Fair Again]( – Larry Davidson, Washington Post - [Investors Should Heed the Warning from Treasuries]( – Komal Sri-Kumar, Bloomberg View Copyright © 2018 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website, thefiscaltimes.com. Our mailing address is: The Fiscal Times 712 Fifth AvenueNew York, NY 10019 [Add us to your address book](//thefiscaltimes.us1.list-manage.com/vcard?u=40d2c5373681f5cd830b6d823&id=714147a9cf) If someone has forwarded this email to you, consider signing up for The Fiscal Times emails on our [website](. Want to change how you receive these emails? You can [update your preferences]( or [unsubscribe from this list](