Trump retreats on shutdown

In a swift reversal, the White House on Tuesday dropped its demand that a government funding measure include $5 billion for President TrumpDonald John TrumpGOP senators balk at lengthy impeachment trial Warren goes local in race to build 2020 movement 2020 Democrats make play for veterans' votes MORE’s wall on the Mexican border.

Trump’s concession paves the way for lawmakers to reach a compromise and end the Congress without a partial government shutdown. It also raises questions over whether Trump will ever get full funding for his wall now that Democrats are poised to take control of the House in a few weeks. 

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Republican and Democratic leaders still need to iron out the details of a possible deal, but the biggest wild card in the debate, Trump, appears to have taken a shutdown off the table. 

Still, the walk-back is a stunning blow to the White House and Republicans, who stared down and out-maneuvered Democrats in a three-day shutdown in January. This time around, Republicans caved.

Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellGOP senators balk at lengthy impeachment trial Graham: Senate trial 'must expose the whistleblower' Graham says Schiff should be a witness in Trump impeachment trial MORE (R-Ky.), who has been in close consultations with Trump, told reporters Tuesday afternoon that he is confident a partial shutdown will be avoided. Funding for about 25 percent of the federal government is due to expire Saturday. 

“I think a government shutdown is not a good option,” McConnell said. “We’ve been down this path before and I don’t believe we’ll go down this path again.”

“I think there’s certainly bipartisan support for avoiding a government shutdown,” he added. 

White House press secretary Sarah Huckabee Sanders signaled a breakthrough Tuesday when she told Fox News “at the end of the day we don’t want to shut down the government.” 

It was a dramatic turnaround from a week ago, when Trump declared at a televised White House meeting that he would be “proud” to shut down the government. 

“I will be the one to shut it down,” he told surprised Democratic leaders. 

Trump added he wouldn’t accept any spending bill “if it’s not good on border security.”

The president was far less defiant on Tuesday when addressing the spending fight, only saying that it is “too early to say” whether a shutdown will be averted. 

The president also stressed he is determined to get $5 billion in wall funding, one way or another.

“We need border security,” he said.

The looming prospect of a shutdown added to the host of uncertainties hanging over the economy and playing havoc with the stock market, which dropped precipitously in the past week. The Dow Jones Industrial Average and the S&P 500 finished Tuesday up slightly. 

Sanders on Tuesday said the administration is now exploring alternative funding “that we can couple with the money that would be given through congressional appropriations” that would help the president protect the southern border. 

Republican senators say the president is looking at reprogramming defense funding or other federal accounts to pay for more border fencing. 

Trump hinted at the idea last week. 

“If the Democrats do not give us the votes to secure our Country, the Military will build the remaining sections of the Wall. They know how important it is,” he tweeted Dec. 11. It remains unclear if this approach is viable, however.

Regardless, the GOP-led Congress will end soon without delivering on Trump’s wall, which was one of his top campaign promises in 2016. Trump vowed Mexico would pay for the wall and the White House continues to say that could still occur, pointing without specifics to the recently renegotiated deal on the North American Free Trade Agreement.

Usually it’s the job of the House, where spending bills traditionally originate, to get the ball rolling by sending appropriations bills to the Senate. But dispirited House Republicans are picking up the pieces from losing 40 seats last month and are in the midst of a leadership vacuum as Speaker Paul RyanPaul Davis Ryan Retirees should say 'no thanks' to Romney's Social Security plan California Governor Newsom and family dress as 2020 Democrats for Halloween DC's liaison to rock 'n' roll MORE (R-Wis.) winds down his congressional career. The House wasn’t even close to having the votes to pass Trump’s $5 billion wall bill.

Shortly after Sanders spoke Tuesday, McConnell offered Democrats a deal: $1.6 billion in money for border fencing combined with $1 billion for the president to use on unspecified immigration matters. 

Republicans, however, were vague about what accounts would be used to create the $1 billion supplemental fund. McConnell said he made the offer after consulting with the White House, describing it as “reasonable” and “a way to thread the needle.” 

“I might say the administration is extremely flexible on this issue,” he told reporters. 

Republicans and Democrats on the Senate Appropriations Committee agreed earlier this year to provide $1.6 billion for border fencing, an amount that Sen. Patrick LeahyPatrick Joseph LeahyCongress hunts for path out of spending stalemate This week: House kicks off public phase of impeachment inquiry Senators press NSA official over shuttered phone surveillance program MORE (Vt.), the senior Democrat on the panel, said Tuesday he still supports. 

McConnell invited Senate Democratic Leader Charles SchumerCharles (Chuck) Ellis SchumerOvernight Health Care: Trump officials making changes to drug pricing proposal | House panel advances flavored e-cig ban | Senators press FDA tobacco chief on vaping ban Chad Wolf becomes acting DHS secretary Schumer blocks drug pricing measure during Senate fight, seeking larger action MORE (N.Y.), Senate Appropriations Committee Chairman Richard ShelbyRichard Craig ShelbyWhite House prepared to support December CR On The Money: Trump seeks to shift spotlight from impeachment to economy | Appropriators agree to Dec. 20 funding deadline | New study says tariffs threaten 1.5M jobs Appropriators agree to Dec. 20 funding deadline MORE (R-Ala.) and Leahy to discuss the offer. 

The legislators discussed the possibility of passing a spending package that would include all seven unfinished appropriations bills at the funding levels Congress previously approved for fiscal 2019. 

“What we’re working on now is on how to get all of the stuff funded. The clock’s ticking,” Shelby told reporters after the meeting in McConnell’s office.

But after weighing the GOP proposal in a subsequent meeting with House Democratic Leader Nancy PelosiNancy PelosiOvernight Health Care: Trump officials making changes to drug pricing proposal | House panel advances flavored e-cig ban | Senators press FDA tobacco chief on vaping ban Speaker Pelosi, it's time to throw American innovators a lifeline Why Americans must tune in to the Trump impeachment hearings MORE (Calif.), Schumer called McConnell to reject the plan. 

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“Let me be clear, the Republican offer today would not pass either chamber. We Democrats have made two reasonable offers that could earn overwhelming bipartisan support in both the House and Senate,” Schumer told reporters Tuesday afternoon.

“A $1 billion slush fund is not what is right, what the American people want, and it couldn’t get votes in either House to pass,” he added. 

Schumer also shot down the prospect of Trump reprogramming money for the border wall without congressional approval. 

“They need congressional approval. They’re not getting it for the wall, plain and simple,” he said.

McConnell later blamed Pelosi for holding up a possible deal because she’s worried about losing liberal support ahead of her difficult Speaker’s election next month. 

“I believe that incoming Speaker Pelosi has little latitude to make a deal,” he said. “I must say if I were in her shoes, I would rather not be dealing with this year’s business next year.” 

McConnell argued that Pelosi and the incoming House Democratic majority would be better off by wrapping up work on the fiscal 2019 spending bills before the start of the new Congress. 

“I would assume her preference would be to roll out the new Democratic agenda by the fresh new Democratic Congress in the early stages. But I think this prevents that if we end up going with a relatively short-term [stopgap measure],” he said. 

Pelosi made a rare trip to the Senate side of the Capitol midday Tuesday to meet with Schumer. She later made an impromptu statement to the press in the Senate’s famed Ohio Clock Corridor, declaring the GOP offer unacceptable. 

McConnell said he and White House officials will discuss other possible ways forward. 

“Once I get an answer to that, I will talk to Sen. Schumer again and see what we can do,” he said. 

Sen. Roger WickerRoger Frederick WickerMicrosoft embraces California law, shaking up privacy debate Trump circuit court nominee in jeopardy amid GOP opposition Pay America's Coast Guard MORE (R-Miss.) said Senate Republicans may try to persuade Trump to accept the $1.6 billion offer for border fencing and drop the request for an additional $1 billion for other immigration-related issues. 

Asked about the $1 billion supplemental fund, Wicker said, “I’m not sure I would insist on that. I think the president could be persuaded to sign the [Department of Homeland Security] bill that’s already been agreed to without it.” 

Other lawmakers floated the possibility of a short-term stopgap that would fund federal agencies until January or February, punting the debate on border fencing into next year. 

Sen. Roy BluntRoy Dean BluntGOP senators balk at lengthy impeachment trial Alcohol industry races to save tax break by year-end deadline McConnell, GOP leaders say they won't be watching House impeachment hearing MORE (Mo.), a member of Senate GOP leadership and the Appropriations Committee, predicted Congress would pass a short-term stopgap for the seven unfinished spending bills.  

“That’s my guess,” he said, though admitted it’s not clear how long the extension would last.

Schumer told reporters that if Republican leaders advance a short-term funding bill, “it’s something we’d very seriously consider.” 

But McConnell, who has made getting the appropriations process back on track a top priority, said he’s not enthusiastic about passing a stopgap measure. 

“If we end up going with a relatively short-term [continuing resolution], we will end up, in effect, punting this year’s business into next year. I think it’s not a very desirable outcome,” he said. 

Jordain Carney and Niv Elis contributed.