Tag Archives: partial government shutdown

U.S. Democrats set showdown with Republicans on federal debt limit

WASHINGTON (Reuters) -The top Democrats in the U.S. Congress on Monday said they would aim to continue funding the government and increase its borrowing authority in a single bill in coming days, setting up a showdown with Republicans who have vowed not to approve more debt.

House of Representatives Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer said the bill, which must pass by Oct. 1 to avoid the third partial government shutdown in the past decade, would also suspend the nation’s borrowing limit until after the 2022 elections that will determine which party controls Congress.

But with Senate Republicans vowing to oppose any increase in federal borrowing authority, the two parties are engaging in a dangerous game that could cause widespread government disruptions or at the very least rattle financial markets until a deal is reached.

Democratic Senator Patrick Leahy, who chairs the Senate Appropriations Committee with oversight of government spending, told reporters that with 60 votes needed in that chamber to advance legislation and with Republicans in opposition, there likely are not the votes to pass the combined measures.

“I’m not sure what’s going to happen,” Leahy said.

Democrats so far have rebuffed Senate Republican Leader Mitch McConnell’s suggestion that the debt limit be linked to a $3.5 trillion budget reconciliation bill that Democrats hope to pass without any Republican support under a special procedure.

Democrats insist that the debt limit increase should remain a bipartisan effort.

(Reporting by Doina Chiacu and Richard Cowan; Editing by Scott Malone, Chris Reese and David Gregorio)

U.S. spending deal would raise tobacco age, deny some of Trump border wall funding

By Richard Cowan and Susan Cornwell

WASHINGTON (Reuters) – Congress would raise the U.S. tobacco purchasing age to 21 and permanently repeal several of the Affordable Care Act’s (ACA) taxes under a massive government spending bill due to be released later on Monday, congressional sources said.

Republican and Democratic lawmakers hope to pass the $1.4 trillion spending bill before current government funding runs out on Saturday, to avoid a partial government shutdown and head off the kind of messy budget battle that resulted in a record 35-day interruption of government services late last year and early this year.

The legislation, worked out during weeks of negotiations between leading lawmakers and the Trump administration, denies President Donald Trump the spending increase he has sought to build his signature wall along the U.S.-Mexico border.

Most Democrats and some Republicans support a mix of improved physical barriers at the border, along with a combination of high-tech surveillance equipment and patrols by all-terrain vehicles and even horses.

They have mostly rejected Trump’s calls for at least $24 billion over the long run to build his much-touted wall, which he originally said Mexico would finance. Mexico rejected that idea. The wall’s price tag could escalate as the federal government is forced to acquire private lands for construction.

The crackdown on youth smoking, by changing the minimum age for cigarette and other tobacco purchases to 21 from the current 18, would give the Food and Drug Administration six months to develop regulations. The agency would then have three years to work with states on implementing the change.

The largest expenditures in the bill is for the Department of Defense, which would get a total of $738 billion for this year, $22 billion more than last year. It does not include “mandatory” programs, such as Social Security and Medicare, which are funded separately.

The legislation also includes $425 million in additional federal grants to help local governments prepare for the November 2020 presidential and congressional elections.

Some of the money would be used to harden infrastructure against cyber attacks following election meddling by Russia in 2016.

Negotiators settled on $7.6 billion for conducting next year’s census, which is done once every 10 years. That would be $1.4 billion more than Trump proposed.

The bill also allocates $25 million for federal gun violence research, following a decades-long suspension of such funding.

All of the money would fund government programs through Sept. 30, 2020.

The legislation would repeal several taxes originally created to help fund the ACA, popularly known as Obamacare, that had been delayed or were only intermittently in effect.

It calls for a permanent repeal of the so-called “Cadillac tax,” a 40% tax on generous health insurance plans.

It had been intended to encourage corporations to buy lower cost plans for employees but was opposed by many unions that had negotiated their health insurance plans and by businesses who said it was a benefit workers valued. The tax was delayed and never went into effect.

The spending bill would also repeal the 2.3% tax on the sale of medical devices such as catheters and pacemakers. This drew opposition from bipartisan lawmakers who said it hurt innovation at medical device companies.

Another tax to be repealed is an industry-wide health insurance fee of about 2.5% to 3% of premiums collected.

(This version of the story has been refiled to add dropped word “not” in seventh paragraph)

(Reporting by Susan Cornwell and Richard Cowan; Editing by Andy Sullivan, Chizu Nomiyama and Bill Berkrot)

U.S. Congress advances border security bill without Trump border wall

A visitor walks by the U.S. Capitol on day 32 of a partial government shutdown as it becomes the longest in U.S. history in Washington, U.S., January 22, 2019. REUTERS/Jim Young

By Richard Cowan

WASHINGTON (Reuters) – The U.S. Congress on Thursday aimed to end a dispute over border security with legislation that would ignore President Donald Trump’s request for $5.7 billion (£4.45 billion) to help build a wall on the U.S.-Mexico border but avoid a partial government shutdown.

Late on Wednesday, negotiators put the finishing touches on legislation to fund the Department of Homeland Security (DHS) through Sept. 30, the end of the fiscal year, along with a range of other federal agencies.

Racing against a Friday midnight deadline, when operating funds expire for the agencies that employ about 800,000 workers at the DHS, the departments of Agriculture, Commerce, Justice and others, the Senate and House of Representatives aimed to pass the legislation later on Thursday.

That would give Trump time to review the measure and sign it into law before temporary funding for about one-quarter of the government expires.

Failure to do so would shutter many government programs, from national parks maintenance and air traffic controller training programs to the collection and publication of important data for financial markets, for the second time this year.

“This agreement denies funding for President Trump’s border wall and includes several key measures to make our immigration system more humane,” House Appropriations Committee Chairwoman Nita Lowey, a Democrat, said in a statement.

According to congressional aides, the final version of legislation would give the Trump administration $1.37 billion in new money to help build 55 miles (88.5 km) of new physical barriers on the southwest border, far less than what Trump had been demanding.

It is the same level of funding Congress appropriated for border security measures last year, including barriers but not concrete walls.

Since he ran for office in 2016, Trump has been demanding billions of dollars to build a wall on the southwest border, saying “crisis” conditions required a quick response to stop the flow of illegal drugs and undocumented immigrants, largely from Central America.

He originally said Mexico would pay for a 2,000-mile (3,200-km) concrete wall – an idea that Mexico dismissed.

Trump has not yet said whether he would sign the legislation into law if the Democratic-controlled House of Representatives and Republican-led Senate approve it, even as many of his fellow Republicans in Congress were urging him to do so.

Instead, he said on Wednesday he would hold off on a decision until he examines the final version of legislation.

But Trump, widely blamed for a five-week shutdown that ended in January, said he did not want to see federal agencies close again because of fighting over funds for the wall.

Senator Richard Shelby, the Republican negotiator who is chairman of the Senate Appropriations Committee, said in a Twitter post he spoke to Trump later on Wednesday and he was in good spirits. Shelby told Trump the agreement was “a downpayment on his border wall.”

‘NATIONAL EMERGENCY’

Republican Senator Lindsey Graham, who is in regular contact with the White House, said Trump was “inclined to take the deal and move on.”

But Graham also told reporters that Trump would then look elsewhere to find more money to build a border wall and was “very inclined” to declare a national emergency to secure the funds for the project.

Such a move likely would spark a court battle, as it is Congress and not the president that mainly decides how federal funds get spent. Several leading Republicans have cautioned Trump against taking the unilateral action.

Under the bill, the government could hire 75 new immigrant judge teams to help reduce a huge backlog in cases and hundreds of additional border patrol agents.

Hoping to reduce violence and economic distress in Central America that fuels immigrant asylum cases in the United States, the bill also provides $527 million to continue humanitarian assistance to those countries.

The House Appropriations Committee said the bill would set a path for reducing immigrant detention beds to about 40,520 by the end of the fiscal year, down from a current count of approximately 49,060.

Democrats sought reductions, arguing that would force federal agents to focus on apprehending violent criminals and repeat offenders and discourage arrests of undocumented immigrants for minor traffic violations, for example.

The Senate Appropriations Committee, which is run by Republicans, said there were provisions in the bill that could result in an increase in detention beds from last year.

Lowey said the bill would improve medical care and housing of immigrant families in detention and expand a program providing alternatives to detention.

The wide-ranging bill also contains some important domestic initiatives, including a $1.2 billion increase in infrastructure investments for roads, bridges and other ground transport, as well as more for port improvements.

With the 2020 decennial census nearing, the bill provides a $1 billion increase for the nationwide count. Also, federal workers, battered by the record 35-day partial government shutdown that began on Dec. 22 as Trump held out for wall funding, would get a 1.9 percent pay increase if the bill becomes law.

(Reporting by Richard Cowan; Editing by Robert Birsel and Chizu Nomiyama)

Trump leaves options open on deal to prevent government shutdown

U.S. President Donald Trump listens next to Commerce Secretary Wilbur Ross during a Cabinet meeting at the White House in Washington, U.S., February 12, 2019. REUTERS/Carlos Barria

By Richard Cowan and Steve Holland

WASHINGTON (Reuters) – U.S. President Donald Trump left his options open on Wednesday over whether to sign a funding deal that would avert another partial government shutdown but leave him short of the money he wants to build a wall on the border with Mexico.

The Republican president said earlier this week he is not happy with a compromise thrashed out in Congress and has not ruled out a possible veto of the legislation.

But a source familiar with the situation said on Wednesday that Trump would likely back the bipartisan deal, even if it only gives him $1.37 billion for border fencing rather than the $5.7 billion he is seeking to help build the wall.

White House spokeswoman Sarah Sanders said the administration was waiting until it is clear exactly what lawmakers are proposing.

“We want to see what the final piece of legislation looks like,” White House spokeswoman Sarah Sanders told reporters. “It’s hard to say definitively whether or not the president is going to sign it until we know everything that’s in it.”

Another White House spokeswoman, Mercedes Schlapp, told CNN that lawyers were reviewing the administration’s options should Congress not provide Trump’s demanded money for the wall, a signature campaign promise in his 2016 election win.

With a Friday night deadline looming before government agencies begin closing for lack of funding, senior congressional Republicans have urged Trump to back the deal.

They have little appetite for a repeat of the 35-day partial shutdown in December and January – the longest in U.S. history -which closed about a quarter of the federal agencies and left some 800,000 federal workers without pay.

But Trump has come in for criticism from the right for wavering on support for the border wall, which the administration says will cut illegal immigration and drug smuggling.

“Trump talks a good game on the border wall, but it’s increasingly clear he’s afraid to fight for it,” right-wing commentator Ann Coulter tweeted on Tuesday. Trump abandoned a planned compromise on funding for the wall in December after similar criticism.

OTHER OPTIONS

The Washington Post, citing a White House official, said Trump was likely to explore using his executive power to reallocate other federal funds for barrier projects along the southern border. CNN, citing the White House, also said Trump was weighing the use of an executive order, among other options.

The president previously threatened to declare a “national emergency” if Congress did not provide money specifically for the wall — a move that would almost certainly draw opposition in Congress and in the courts.

The Democrat-controlled U.S. House of Representatives could vote as soon as Wednesday evening, a senior aide said, despite not yet having produced a written copy of the agreement reached by congressional negotiators on Monday night.

The accord must also be passed by the Republican-controlled Senate and signed by Trump by midnight on Friday to prevent a shutdown.

The measure’s fate in the House was far from certain given the risk that conservatives and liberals will oppose the compromise for different reasons.

Congressional sources said the deal includes $1.37 billion for new border fencing, about the same as last year – along 55 miles (90 km) of the border – but not the $5.7 billion Trump has demanded for the wall.

Democrats say Trump’s planned wall would be expensive, ineffective and immoral.

(Reporting by Richard Cowan and Susan Cornwell; Additional reporting by Amanda Becker, Susan Heavey and Lisa Lambert; Writing by Alistair Bell; Editing by Jeffrey Benkoe and Jonathan Oatis)

White House says Trump undecided on deal to avert another shutdown

President Donald Trump has not yet decided whether to back a deal hammered out by congressional negotiators to avert another partial government shutdown, the White House said on Tuesday, putting the future of the agreement that contains funds for U.S.-Mexican border security but not his promised wall in doubt.

WASHINGTON (Reuters) – President Donald Trump has not yet decided whether to back a deal hammered out by congressional negotiators to avert another partial government shutdown, the White House said on Tuesday, putting the future of the agreement that contains funds for U.S.-Mexican border security but not his promised wall in doubt.

Democratic and Republican negotiators reached the tentative deal on Monday night on border security provisions and money to keep several government agencies including the Department of Homeland Security funded through Sept. 30, the end of the current fiscal year. Temporary funding for about a quarter of the government is due to expire on Friday.

“I am cautiously optimistic that we will get this through,” Democratic Representative Nita Lowey, who chairs the House of Representatives Appropriations Committee, told CNN. “We cannot shut the government down.”

Asked if the Republican president had signaled support for the bipartisan deal, Lowey did not answer directly, but said it had the backing of U.S. House Speaker Nancy Pelosi and other Democrats, who control the chamber.

Trump, who triggered a 35-day partial government shutdown with his December demand for $5.7 billion to help build the border wall, has not yet made up his mind on the deal, said a White House official, speaking on condition of anonymity.

“No decision has been made,” the official said.

Republican Senator Richard Shelby on Monday said the House-Senate committee set up last month at the end of the previous shutdown had an agreement in principle to pay for border security programs.

A final agreement is expected by late on Wednesday. The funding legislation would need to be passed in the House and Senate and signed by Trump.

Trump last month agreed to end the shutdown without getting money for a wall, which is opposed by Democrats. The shutdown roiled financial markets and left hundreds of thousands of federal workers and contractors without pay.

Trump’s long-promised wall was a cornerstone of his presidential campaign. He had said it would be paid for by Mexico and not by U.S. taxpayers.

Congressional sources said the agreement includes $1.37 billion for new fencing along 55 miles (90 km) of the southern border but only with currently used designs, such as “steel bollard” fencing. It will also address immigrant detention beds.

Trump will have to decide whether to sign the measure into law given its backing from congressional Republicans, or side with conservative commentators who have the president’s ear such as Sean Hannity of Fox News, who late on Monday called it a “garbage compromise.” Democrats oppose the wall but support border security efforts.

Trump has threatened to declare a “national emergency” if Congress does not give him wall money.

“Just so you know – we’re building the wall anyway,” Trump said at a rally in the border city of El Paso, Texas, shortly after the deal was reached. “Maybe progress has been made – maybe not.”

Beto O’Rourke, the former Democratic congressman from Texas considering a 2020 White House run, accused Trump at a counter-rally nearby of stoking “false fear” about immigrants and telling “lies” about O’Rourke’s hometown of El Paso.

Without new funds, federal agencies would again have to suspend some activities this weekend, ranging from maintenance of national parks to the publishing of important economic data.

(Reporting by Richard Cowan; Additional reporting by Susan Cornwell and Steve Holland in Washington and Roberta Rampton in El Paso, Texas; Editing by Will Dunham)

Talks collapse on border deal as U.S. government shutdown looms

FILE PHOTO: Construction fencing surrounds part of the U.S. Capitol building in Washington, U.S. November 2, 2018. REUTERS/Jonathan Ernst/File Photo

By Richard Cowan and Doina Chiacu

WASHINGTON (Reuters) – Talks on border security funding collapsed after Democratic and Republican lawmakers clashed over immigrant detention policy as they worked to avert another U.S. government shutdown, a Republican senator said on Sunday.

“The talks are stalled right now,” Republican Senator Richard Shelby told “Fox News Sunday.” He said the impasse was over Democrats’ desire to cap the number of beds in detention facilities for people who enter the country illegally.

Efforts to resolve the dispute over border security funding extended into the weekend as a special congressional negotiating panel aimed to reach a deal by Monday, lawmakers and aides said.

Democratic Senator Jon Tester played down any breakdown in talks. “It is a negotiation. Negotiations seldom go smooth all the way through,” he told the Fox program. Tester, one of 17 negotiators, said he was hopeful a deal could be reached.

But Shelby put the chances of reaching a deal by Monday at 50-50. No further talks were scheduled, a source told Reuters on condition of anonymity.

The lawmakers hoped to have an agreement by Monday to allow time for the legislation to pass the U.S. House of Representatives and Senate and get signed by President Donald Trump by Friday when funding for the Department of Homeland Security and other federal agencies expires.

Trump agreed on Jan. 25 to end a 35-day partial U.S. government shutdown without getting the $5.7 billion he had demanded from Congress for a wall along the border with Mexico, handing a political victory to Democrats.

Instead, a three-week spending deal was reached with congressional leaders to give lawmakers time to resolve their disagreements about how to address security along the border.

One sticking point has been the Democrats’ demand for funding fewer detention beds for people arrested by U.S. Immigration and Customs Enforcement (ICE) agents. Republicans want to increase the number as part of their drive to speed immigrant deportations.

Since he ran for president in 2016, Trump has pledged to stop the influx of undocumented immigrants by building a wall on the border and crack down on immigrants living in the United States illegally by aggressively conducting more deportations.

‘DESPERATELY NEEDED’

Democrats proposed lowering the cap on detention beds to 35,520 from the current 40,520 in return for giving Republicans some of the money they want for physical barriers, the source familiar with negotiations said.

But Democrats would create a limit within that cap of 16,500 beds at detention facilities for undocumented immigrants apprehended in the interior of the country. The remainder would be at border detention centers.

By having the interior cap, ICE agents would be forced to focus on arresting and deporting serious criminals, not law-abiding immigrants, a House Democratic aide said on Sunday.

Republicans balked at the Democrats’ sub-cap offer, the source said.

Trump weighed in Sunday, saying the Democratic proposal would protect felons. “They are offering very little money for the desperately needed Border Wall & now, out of the blue, want a cap on convicted violent felons to be held in detention!” Trump said on Twitter.

“Claims that this proposal would allow violent criminals to be released are false,” the Democratic aide said.

Republican Senator Lindsey Graham, who is close to Trump, warned against limiting beds. “Donald Trump is not going to sign any legislation that reduces the bed spaces. You can take that to the bank,” he said on Fox News’ “Sunday Morning Futures.”

Lawmakers working on a border deal also have not yet nailed down the amount of money to go for physical barriers along the southern U.S. border, the source said.

While a growing number of Republicans in Congress have made it clear they would not embrace another shutdown, White House budget director Mick Mulvaney said he could not rule it out.

“You absolutely cannot,” Mulvaney, who is also Trump’s acting chief of staff, told NBC’s “Meet the Press” on Sunday. “Is a shutdown entirely off the table? The answer is no.”

Lawmakers, however, were working to avoid it.

On Friday, some of the negotiators said that if Congress could not pass a border security bill by Friday, they would move to pass another stop-gap funding bill to avert a shutdown and allow more time to reach a border deal.

(Reporting by Richard Cowan, Doina Chiacu, Howard Schneider; Editing by Jeffrey Benkoe)

Top U.S. lawmakers to resume border talks, avert shutdown

The personalized gavel of House Appropriations Committee Chairwoman Nita Lowey (D-NY), serving as the Chairwoman of a bipartisan group of U.S. lawmakers from both the U.S. Senate and U.S. House of Representatives, is seen at the start of their first public negotiating session over the U.S. federal government shutdown and border security on Capitol Hill in Washington, U.S. January 30, 2019. REUTERS/Yuri Gripas

WASHINGTON (Reuters) – The top four Democratic and Republican negotiators in the U.S. Congress on border security funding plan to meet on Monday in an attempt to reach a deal that would avert another partial government shutdown by a Friday deadline.

House of Representatives Appropriations Committee Chairwoman Nita Lowey, a Democrat, Senate Appropriations Committee Chairman Richard Shelby, a Republican, and two other senior lawmakers will attend the meeting, according to a congressional aide.

Negotiations broke down during the weekend over funding for immigrant detention beds and physical barriers that would be funded along the U.S.-Mexico border.

The lawmakers hope to reach an agreement on Monday to allow time for the legislation to pass the House and Senate and get signed by Republican President Donald Trump by Friday, when funding for the Department of Homeland Security and several other federal agencies expires.

Trump agreed on Jan. 25 to end a 35-day partial U.S. government shutdown without getting the $5.7 billion he had demanded from Congress for a long-promised wall along the border with Mexico. Democrats oppose a wall, calling it ineffective, expensive and immoral.

Instead, a three-week spending deal was reached with congressional leaders to give lawmakers time to resolve their disagreements about how to address border security.

(Reporting by Richard Cowan; Editing by Jeffrey Benkoe and Will Dunham)

U.S. weekly jobless claims jump to near one-and-a-half year high

FILE PHOTO - A man holds a leaflet at a military veterans' job fair in Carson, California October 3, 2014. REUTERS/Lucy Nicholson

By Lucia Mutikani

WASHINGTON (Reuters) – The number of Americans filing applications for unemployment benefits surged to near a 1-1/2-year high last week, but economists dismissed the jump as a fluke and said temporary factors, including a partial government shutdown, were to blame.

A strike by teachers in California, cold weather and difficulties adjusting the data around moving holidays like Martin Luther King Jr. Day also likely were factors in the spurt in claims reported by the Labor Department on Thursday.

“We are skeptical the rise could reflect a true weakening in the labor market given that there are few other signs of weaker labor markets in January,” said John Ryding, chief economist at RDQ Economic in New York. “Nonetheless, if we maintain this higher level of jobless claims in the coming weeks, that would indicate a pickup in layoff activity.”

Initial claims for state unemployment benefits jumped 53,000 to a seasonally adjusted 253,000 for the week ended Jan. 26, the highest level since September 2017, the Labor Department said. The rise was also the largest since September 2017.

Claims dropped to 200,000 in the prior week, which was the lowest level since October 1969. Economists polled by Reuters had forecast claims rising to only 215,000 in the latest week.

The claims data covered the Martin Luther King Jr. holiday, which occurred later this year than in the past. Economists believe non-federal government workers who were temporarily unemployed during the longest government shutdown in the country’s history likely helped to boost claims last week.

The surge in claims came amid a recent deterioration in business and consumer confidence, which was partly blamed on a five-week government shutdown that has since ended.

The Federal Reserve on Wednesday kept interest rates steady but said it would be patient in lifting borrowing costs further this year in a nod to growing uncertainty over the economy’s outlook. The U.S. central bank removed language from its December policy statement that risks to the outlook were “roughly balanced.”

The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 5,000 to 220,250 last week.

The claims data has no bearing on January’s employment report, which is scheduled for release on Friday, as it falls outside the survey period. According to a Reuters survey of economists, non-farm payrolls likely increased by 165,000 jobs in January after jumping by 312,000 in December.

The 35-day government shutdown is not expected to have an impact on January’s job growth, as workers who were furloughed will be paid retroactively together with colleagues who worked without pay. However, those workers who stayed at home during the shutdown are expected to temporarily push up the unemployment rate in January.

The dollar fell against most major currencies, dropping to a two-week low versus the yen, pressured by the Fed’s cautious economic outlook. U.S. Treasury yields fell, while stocks on Wall Street were trading mostly higher.

STEADY WAGE GAINS

Underscoring the labor market’s strength, another report on Thursday from the Labor Department showed its Employment Cost Index, the broadest measure of labor costs, increased 0.7 percent in the fourth quarter after rising 0.8 percent in the July-September period.

The fourth quarter rise lifted the year-on-year rate of increase in labor costs to 2.9 percent, the biggest gain since June 2008, from 2.8 percent in the 12 months through September.

Wages and salaries, which account for 70 percent of employment costs, rose 0.6 percent in the fourth quarter after advancing 0.9 percent in the prior period. They were up 3.1 percent in the 12 months through December.

That was the biggest increase since June 2008 and followed a 2.9 percent gain in the year through September.

“It supports our view that the tightness in the labor market is generating upward pressure on compensation,” said Daniel Silver, an economist at JPMorgan in New York.

While the labor market is on solid footing, manufacturing appears to be slowing. A third report on Thursday showed the MNI Chicago business barometer dropped 7.1 points to a reading of 56.7 in January as new orders tumbled to a two-year low. The survey’s measure of production dropped to a 10-month low.

There was some good news on the housing market. The Commerce Department reported new home sales vaulted 16.9 percent in November to a seasonally adjusted annual rate of 657,000 units. The surge erased October’s 8.3 percent plunge in single-family home sales.

The November home sales report was delayed by the government shutdown, which affected the Commerce Department.

The housing market struggled in 2018, weighed down by acute shortages of homes for sales, which boosted prices, as well as higher mortgage rates. But there are glimmers of hope as house price inflation has slowed significantly and mortgage rates have eased after shooting up last year.

Supply, however, still remains tight.

“We expect a further rise in new home sales during 2019 as homebuyers look to new builds, with inventory conditions for existing homes still extremely tight,” said Ben Ayers, senior economist at Nationwide in Columbus, Ohio.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Paul Simao)

Shutdown costs pegged at $3 billion as U.S. government reopens

Commuters walk from the Federal Triangle Metro station after the U.S. government reopened with about 800,000 federal workers returning after a 35-day shutdown in Washington, U.S., January 28, 2019. REUTERS/Joshua Roberts

By David Morgan and Richard Cowan

WASHINGTON (Reuters) – The U.S. economy was expected to lose $3 billion from the partial federal government shutdown over President Donald Trump’s demand for border wall funding, congressional researchers said on Monday as 800,000 federal employees returned to work after a 35-day unpaid furlough.

The nonpartisan Congressional Budget Office (CBO) said the cost of the shutdown will make the U.S. economy 0.02 percent smaller than expected in 2019. More significant effects will be felt by individual businesses and workers, particularly those who went without pay.

Overall, the U.S. economy lost about $11 billion during the five-week period, CBO said. However, CBO expects $8 billion to be recovered as the government reopens and employees receive back pay.

The longest shutdown in U.S. history ended on Friday when Trump and Congress agreed to temporary government funding – without money for his wall – as the effects of the shutdown intensified across the country.

Republican Trump had demanded that legislation to fund the government contain $5.7 billion for his long-promised wall along the U.S.-Mexico border. He says it is necessary to stop illegal immigration, human trafficking and drug smuggling, while Democrats call it costly, inefficient and immoral.

A committee of lawmakers from both major parties holds their first open meeting on Wednesday as they try to negotiate a compromise on border security before the Feb. 15 deadline.

The CBO estimated the shutdown reduced gross domestic product in the last quarter of 2018 by $3 billion.

It said that in the first quarter of 2019, the level of real GDP is estimated to be $8 billion lower than it would have been, citing “an effect reflecting both the five-week partial shutdown and the resumption in economic activity once funding resumed.”

Trump said he would be willing to shut down the government again if lawmakers do not reach a deal he finds acceptable on border security. On Sunday, he expressed skepticism such a deal could be made, putting the odds at 50-50.

Trump has also said he might declare a national emergency to get money for the border wall. Democrats would likely challenge that in court.

The CBO report serves as a stark warning to Trump against another shutdown, said U.S. Representative John Yarmuth, the Democratic chairman of the House Budget Committee.

“The CBO confirms that the Trump shutdown had a debilitating effect on our entire economy, and if it were to resume in three weeks, millions of Americans would again share the pain of the 800,000 workers who spent the past month without a paycheck,” he said.

Most employees should be paid by Thursday for back pay, which one study estimated at $6 billion for all those furloughed. Contractors and businesses that relied on federal workers’ business, however, face huge losses, although some lawmakers are pushing legislation to pay contractors back as well.

Federal workers poured off of commuter buses and subway escalators on a block of downtown Washington on Monday. Federal Communications Commission chairman Ajit Pai greeted employees in the lobby, while the Securities and Exchange Commission offered doughnuts, fruit and coffee.

“I’m ready to go. I’m rested and I’m ready. I’m energized,” Gary Hardy, a manager in the Employee Assistance Program at the Department of Homeland Security.

The National Highway Traffic Safety Administration was reviewing five weeks of auto safety recalls that had been submitted by automakers but has not yet begun posting them publicly. The Federal Aviation Administration said it would assess and prioritize immediate post-shutdown needs.

(Reporting by David Morgan and Richard Cowan; Additional reporting by David Shepardson, Mana Rabiee and Susan Heavey; Writing by Doina Chiacu; Editing by Grant McCool)

Trump says no amnesty for ‘Dreamers,’ signals support in broader deal

U.S. President Donald Trump arrives to deliver remarks on border security and the partial shutdown of the U.S. government in the Diplomatic Room at the White House in Washington, U.S., January 19, 2019. REUTERS/Yuri Gripas

By David Morgan

WASHINGTON (Reuters) – President Donald Trump said on Sunday his proposed immigration deal to end a 30-day partial government shutdown would not lead to amnesty for “Dreamers,” but he appeared to signal support for amnesty as part of a broader immigration agreement.

In a morning Twitter storm, Trump also said he would not seek the removal of millions of illegal immigrants living in the United States, while bashing House of Representatives Speaker Nancy Pelosi and her fellow Democrats for turning down an offer he made on Saturday, including for Dreamers, the immigrants brought to the United States illegally as children.

“No, Amnesty is not a part of my offer. It is a 3-year extension of DACA. Amnesty will be used only on a much bigger deal, whether on immigration or something else,” Trump said on Twitter.

“Likewise there will be no big push to remove the 11,000,000 plus people who are here illegally-but be careful Nancy!”

The Dreamers are protected from deportation under the Deferred Action for Childhood Arrivals (DACA) program.

Banners outside a Catholic church in New York's Queens borough express support for "Dreamer" immigrants in New York, U.S. January 20, 2019. REUTERS/Nick Zieminski

Banners outside a Catholic church in New York’s Queens borough express support for “Dreamer” immigrants in New York, U.S. January 20, 2019. REUTERS/Nick Zieminski

DACA was put in place under former President Barack Obama. The Trump administration said in September 2017 it would rescind DACA, but it remains in effect under court order.

Trump did not make clear what he was referring to regarding the 11 million people mentioned in his tweet. About 12 million people are living in the United States illegally, according to U.S. Department of Homeland Security estimates.

In a Saturday speech from the White House, Trump offered three years of protections for Dreamers and for holders of temporary protected status (TPS), another class of immigrants from designated countries affected by armed conflict, natural disaster or other strife.

Republican Senate Majority Leader Mitch McConnell welcomed the plan as a “bold solution,” while a spokesman said McConnell would seek Senate passage of the proposal this week.

The legislation will include bills to fund government departments that have been closed during the shutdown, as well as some disaster aid and the president’s immigration proposal, a McConnell aide said. The plan will contain $12.7 billion in disaster aid, said another Senate source who asked not to be named.

But Trump’s amnesty tweet caught some Republicans off guard.

“I don’t know what the president’s calling amnesty,” Senator James Lankford, an Oklahoma Republican, told ABC’s “This Week” program. “That’s a longer debate and obviously not something we can solve quickly.”

FILE PHOTO: A federal worker left unpaid or furloughed carries a free bag of groceries from Kraft Foods on the 27th day of the partial government shutdown in Washington, U.S., January 17, 2019. REUTERS/Joshua Roberts

FILE PHOTO: A federal worker left unpaid or furloughed carries a free bag of groceries from Kraft Foods on the 27th day of the partial government shutdown in Washington, U.S., January 17, 2019. REUTERS/Joshua Roberts

Trump appeared to be responding to conservative critics who accused him of proposing amnesty and reneging on a campaign promise, which could alienate his right-wing base.

About one-quarter of the U.S. government shut down on Dec. 22 over Trump’s demand for $5.7 billion to fund a wall along the border with Mexico, which Democrats have refused to consider. Some 800,000 federal workers have been ordered to stay home or work without pay during the shutdown.

The promise of a border wall was a mainstay of Trump’s 2016 presidential election campaign. As a candidate, he said Mexico would pay for the barrier, but the Mexican government has refused.

The shutdown has caused widespread disruptions.

The Transportation Security Administration on Sunday reported an 8 percent national rate of unscheduled absences on Saturday, compared with 3 percent a year ago. More than 50,000 TSA officers are working without pay.

Some airports experienced longer wait times at security checkpoints, and Baltimore/Washington International Thurgood Marshall Airport closed one of its checkpoints because of excessive absences.

‘STARTING POINT’

On Sunday, a day after Trump’s DACA proposal, there appeared to be signs of movement, even as Democrats insisted the government should reopen before proceeding with talks over border security.

“What the president proposed yesterday – increasing border security, looking at TPS, looking at the Dreamers – I’ll use that as a starting point. But you’ve got to start by reopening the government,” U.S. Senator Mark Warner said on NBC’s “Meet the Press.”

Warner, a Virginia Democrat, also said Congress should approve pay for federal workers affected by the shutdown before they miss another paycheck this week.

Bennie Thompson, the Democratic chair of the House Homeland Security Committee, said Democrats were not opposed to physical barriers on the southern border but that Trump’s changing position posed a problem for resolving the border security issue.

“I would not rule out a wall in certain instances,” Thompson said on ABC’s “This Week” on Sunday.

(Reporting by David Morgan in Washington; Additional reporting by Yasmeen Abutaleb and Susan Cornwell in Washington; Editing by Susan Thomas and Peter Cooney)