"No Deal" - Government Shutdown Begins

Update 12:03am ET: The shutdown has brgun.

Per Reuters, the White House says it will reopen negotiations on immigration reform 'when the Democrats start paying our armed forces and first responders'.

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Update 10pm ET:


The New York Times headline summed things up well: Senate Democrats Kill Bill to Keep Government Open Past Midnight

Despite last minute 'compromise' meetings, and continued "hopes" from various sides, The Senate failed to reach the 60 votes necessary to keep the government funded (even for a stopgap) and so, as of midnight tonight, the government will shut down.



John Cornyn, the second-ranking Senate Republican, said the two parties haven’t yet found an agreement that would provide short-term funding for the government with a little more than two hours before the deadline.

“No deal,” Cornyn said as the Senate prepared to take up a House-passed funding bill that Democrats have the votes to block.

A group of lawmakers has been working on a plan for a three-week funding bill that would give Democrats and Republicans time to negotiate a long-term compromise on immigration, the chief sticking point in the spending fight.

CNN's Phil Mattingly explained on air: "Democrats aren't looking for a reduction in time in the continuing resolution, they're looking for substantive policy, commitments, changes or actual legislative text before they are willing to come on board with that."

This is what America will wake up to...


This is the 19th US government shutdown in the last 40 years...


President Trump tweeted before the vote:



While the blame-scaping may have begun days ago, tonight has already seen a full court press of finger-pointing.

Sen. John Kennedy (R-La.) blasted Congress on Friday as a government funding deadline approached, slamming the government as being “run by idiots.”

"Our country was founded by geniuses, but it's being run by idiots," Kennedy told reporters hours before the government was set to enter a shutdown.

Lindsey Graham issued a statement suggesting a three-week compromise CR to Feb 8th:



The White House has estimated 1056 staff will be furloughed during the shutdown.


Updated Contingency Plan For Shutdown Furlough

A. Summary of Contingency Plan

Should Congress not pass a Fiscal Year 2018 ("FY2018") appropriation or continuing resolution ("CR") by January 19, 2018, the Executive Office of the President ("EOP") would be without authority to incur any financial obligations in FY2018, with very limited exceptions, and would therefore implement a contingency plan for shutdown furlough (the "Contingency Plan"). The Contingency Plan entails placing an estimated I 056 ofthe 1715 EOP staff in furlough status ("Non-Excepted Staff'), while an estimated 659 EOP staff would continue to report to duty because they are (i) designated as excepted to perform emergency or excepted functions; (ii) Presidentially Appointed, Senate Confirmed staff; (iii) otherwise exempt from the Anti-deficiency Act; (iv) alternatively funded during a government shutdown (collectively, the "Excepted Staff'). Any EOP personnel that are other government employees ("OGEs" or "Detailees") would be furloughed or continue to report to duty at the discretion of their respective home agencies.

B. Implementation of Contingency Plan

Once it becomes clear that neither an appropriations bill nor a CR will be enacted prior to January 19, 2018, the White House Office of Management & Administration ("M&A") will notify EOP components to begin an orderly shutdown of unfunded functions. Non-Excepted Staff will receive shutdown and furlough notices. Detailees will be notified by their home agencies whether they are to be furloughed.

On Monday, January 22, 2018, Excepted Staff will report to duty. Non-Excepted Staff will also report on January 22, 2018, either in person or via telework for no longer than four hours and for the sole purpose of engaging in orderly shutdown activities. Each EOP component will issue instructions to their employees for orderly shutdown.

C. Specifics of EOP Component Contingency Plan

Each EOP component has carefully considered the number of personnel required not only to complete orderly shutdown activities but also to ensure that the emergency or excepted operations of each EOP component can be carried out during shutdown. The chart below summarizes component-by-component the Excepted Staff that will be required to sustain minimal emergency or excepted operations.


Federal employees will work without pay:


The question is - will government ever re-open? As Trump tweeted earlier, the Democrats want to shutdown to dim the success of the tax cuts; and as Goldman noted earlier, for every week of government shutdown, GDP growth will drop 0.2ppt.

CNN is reporting that House Democrats plan a 10am meeting tomorrow to discuss a stopgap bill.

The battle of the hashtags has begun - #RepublicanShutdown, #TrumpShutdown, or #SchumerShutdown.

All of which distract from the only hashtag that really matters currently - #ReleaseTheMemo.

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Update (6:20 pm ET): Democratic Sen. Heidi Heitkamp says she will vote for a 5-day stopgap plan being hashed out by a group of senate Republicans. While Mulvaney has expressed optimism that a deal will be reached within the next 24 hours, Mark Meadows, leader of the House Freedom Caucus of conservative Republicans, said the 5-day agreement is a nonstarter - Which an administration insider confirmed.

Heitkamp represents North Dakota - a state where Trump won more than 60% of the vote in 2016 - and will be running for re-election in November. Her seat is viewed as vulnerable by some Republicans.

According to the Washington Post, Heitkamp also supported the Republican plan for a one-month extension, as did Indiana's Joe Donnelly and West Virginia Sen. Joe Manchin III. All three senators face a difficult path to reelection in heavily Republican states.

Meanwhile, Mitch McConnell announced on the Senate floor that a procedural vote on the troubled 4-week extension has been scheduled for for 10 pm ET. Senate Democrats will meet at 8:30 pm ET.

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Update (5:40 pm ET): OBM Director Mick Mulvaney says he "thinks there'll be a deal in the next 24 hours."

Meanwhile, a White House aide said a proposed 5-day bill is a non-starter - echoing sentiments expressed by Freedom Caucus head Mark Meadows.

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Update (5:20 pm ET): Trump tweeted that he had an "excellent" meeting with Schumer, and that he's working with both Democratic leaders, as well as Paul Ryan and Mitch McConnell to hammer out a four-week extension.



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Update (2:40 pm ET): Schumer has left the White House meeting with Trump...

He confirmed to reporters that "some progress" has been made, but that a deal has not yet been reached and "disagreements on several issues remain."


Nancy Pelosi says she believes a deal is "within reach."





Steny Hoyer appears to agree:


Citing an anonymous source at the White House, ABC is reporting that talks will continue..

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Update (2 pm ET): House Rules Committee Chairman Pete Sessions said the House will vote again tonight if Trump and Schumer manage to work out a separate deal.

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Update: There is still no vote scheduled for the Senate, but that didn't stop John Cornyn, the Republican No. 2 in the upper chamber, from telling reporters that he expects a vote to be held "after lunch."

Meanwhile, Mark Meadows, leader of the House Freedom Caucus, said he understands a proposal for a five-day short-term fix has been rejected by the House.

According to the latest headline from the New York Times, Trump has invited Democratic leader Chuck Schumer to the White House t try and hammer out a last-minute deal.

Schumer has reportedly accepted, and is on his way to the White House to meet with Trump, who is addressing a crowd of supporters at the March for Life from the Rose Garden.

Fox News is reporting that Schumer has arrived at the White House.



Despite all of this, markets haven't shown much of a reaction...


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Update: Hardly a surprise, Mulvaney and Short arrived more than a half hour late, then proceeded to blast Democrats as obstructionists for trying to force a shutdown.

They even have a name for it: "The Schumer Shutdown".

“This is an attempt by democrats led by Schumer - that’s why we’re calling it the Schumer shutdown - to embarrass the president,” Mulvaney said.

“They don’t oppose anything in there. They support chip they don’t want the cadillac tax to go into place they’ve always supported clean CRs. And again, it worked in the House - there were several Democrats who voted for it,” Mulvaney.

DACA doesn’t expire until March 5 - and therefore, doesn’t need to be dealt with until mid-February, Mulvaney said.

Unlike the last shutdown in 2013, federal parks will be open, Mulvaney said. But all federal employees will be working for nothing (that is, until their back pay is approved by Congress). The military, TSA, Fannie Mae and Freddie Mac will also go to work, but they will not be paid.

As of now, it looks like the federal government expects the shutdown to happen - though Mulvaney said their version of the shutdown would be more "moderate" than the previous shutdown, which happened during the Obama years. Mulvaney accused the Obama administration of "weaponizing" the shutdown by ensuring that virtually all federal employees didn't show up for work. 

While Mulvaney and Short were answering questions from the media, President Trump chimed in on twitter, chiding Democrats for opposing the bill. Trump blasted California Sen. Dianne Feinstein, tweeting a quote from her in the Washington Examiner: "Shutting down the government is a very serious thing...People die, accidents happen. I don't know how I would vote right now on a CR, OK?"




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With the one-month stopgap spending bill stalled in the Senate, the White House is finally accepting the fact that there's little it can do to prevent the government from shutting down at midnight on Friday.

Trump has promised to remain in Washington - postponing a weekend trip to Mar-a-Lago - until the shutdown is averted or ended, and in order to keep the media apprised of what's about the happen, the White House is holding a press conference at 10:30 am ET.

Watch it live below:

The press conference will feature White House Legislative Director Marc Short and OMB Director Mick Mulvaney, who only minutes ago warned that the odds of a shutdown were "50-50" - another way of saying "we have no idea what's going to happen."

According to the Hill, Senate Majority Leader Mitch McConnell adjourned the Senate until 11 a.m. Friday without scheduling a vote on the House measure, giving lawmakers just 13 hours to reach a deal to avert a shutdown. McConnell has vowed to keep the Senate in session until an agreement is reached. Democrats are digging in their heels, demanding that they receive some concessions on DACA, opioids and funding for Puerto Rico before assenting to another short-term spending bill.

One thing's for certain: Don't expect the steady stream of headlines to abate until late tonight...