US: A Shutdown Deal (More Likely than Not)

Published on February 11, 2019

The two key Senate and House Conference Committee lead appropriators will be sitting down in a few hours this afternoon for a last gasp effort to break the political impasse over border security and “the wall” to avoid a second partial federal government shutdown looming this Friday.

*** While the odds are probably even for a second shutdown when the current Continuing Resolution expires at midnight February 15, our sense is that the leverage and momentum has swung sharply in favor of President Trump and the Republican negotiators. We understand that House Speaker Nancy Pelosi has already given the green light to substantially increase the funding for the border wall that will be close to the President’s $5.7 billion demand to get ahead of the Trump’s planned rally in El Paso Texas. ***

*** We think it more likely that a deal can and will be reported out of the House-Senate Conference Committee as soon as tomorrow. The compromise legislative language is likely to entail a Democratic counteroffer raising the total for a semantically vague “physical barrier” along some portions of the southern border from the current $2 billion figure on which the negotiations stalled to a figure “much closer” to the $5.7 billion demanded by President Trump. A bill could, once reported out of the conference committee, proceed without amendments and little debate directly to up-or-down floor votes in the Senate and House. ***

*** Speaker Pelosi in any case, has a challenge ahead of her this week. She knows she will need to find a way to communicate that agreeing to come closer to the president’s $5.7 billion and dropping some restrictions for its use is not actually a capitulation. The president, we believe, will be simultaneously agreeing to substitute personnel and technology for his long, steel-slatted wall. Some “fencing” may be constructed, but not enough to build “the Wall.” ***

Where the Blame May Fall

** Indeed, our sense is that all pressure is now on House Speaker Nancy Pelosi who needs to shift the terms of the debate either later today when the four Appropriation Chairs meet at 3:30, and no later than tomorrow morning. More to the point on Capitol Hill, the public blame is highly likely to fall on the Democrats this time in contrast to the blame squarely put on the President in the first shutdown over the holiday break. We doubt Speaker Pelosi will lose much, if any, support among her rank and file in beating a semantic retreat.

** While this issue has played out over the weekend on the media, with dozens of congressional names being quoted, the focus is best kept on the two key actors in the room, Nita Lowey (D-NY) and Richard Shelby (R-AL), the two chairs of the House and Senate Appropriations Committees. Only those two are the negotiators for Speaker Pelosi and President Trump and the remaining issues can be resolved only through their agreement.

** Staff on both sides were in fact confident they had the essential terms of agreement nearly reached last Thursday. For whatever reason, Democrats let the deal slip through the cracks, insisting on a much smaller appropriations figure — an unusual first for Democrats usually weighing in with the bigger numbers — and once they turned to debating the small details the Democrats lost the political narrative.

** And in contrast to the Democrats’ missed messaging on the micro details of beds and legal counsel, Republicans dominated the media coverage over the weekend with a cleaner and direct messaging on President Trump’s single red line of the $5.7 billion figure mixed with a little mocking over how to define a wall. Senator Shelby, in particular, played chess to the checkers offered by Montana’s Joe Tester on the weekend broadcast shows.

** Shelby put on something of a masterclass of media appearances over the weekend by revealing in his soft, non-threatening voice that the remaining differences between the two parties were the amount of new appropriations for border security, including details on the number of new border agents and of the number of beds for detaining suspected criminals caught at the border. Once the focus was on border security, the heartless image of “the Wall” dissipated.

** Despite our sense the Democrats will soon cede ground on the top line spending number to begin the movement to a deal, by all accounts the shutdown showdown could still stall out and turn into a more economically damaging partial shutdown that with each passing day, narrows down into an ugly binary outcome.

** Speaker Pelosi could, for one, still opt to abandon the conference committee altogether, or threaten to do so, and rush a new bill through the House with Democratic votes to be put to the Senate by Thursday, where it would be sure to stall. But the moment of a political gambit to shift blame back to the Republicans or to Senate Majority Leader Mitch McConnell has almost certainly passed. And Pelosi is not one to snatch defeat from the jaws of her previous win.

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