Following this morning's tweet, in which Trump said that he was meeting with top Democrats Chuck Schumer and Nancy Pelosi to keep the government open, but because "they want illegal immigrants flooding into our Country unchecked", he "doesn't see a deal", and which sent the T-Bill market turmoiling as mid-December government shutdown odds surged, moments ago the top two Democratic leaders in Congress pulled out "abruptly" (in AP's words) of the previously scheduled meeting with President Donald Trump.
Instead of meeting Trump, Schumer and Pelosi shot back with a statement asking for talks with top GOP leaders in Congress. The top democrats said they’d skip a “show meeting” at the White House and instead ask for a meeting with their Republican counterparts, House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell.
“Given that the President doesn’t see a deal between Democrats and the White House, we believe the best path forward is to continue negotiating with our Republican counterparts in Congress instead,” House Minority Leader Nancy Pelosi and Senate Minority Leader Chuck Schumer said in a joint statement.
Some Democrats have called for any year-end spending deal to include legislation that would codify an Obama administration policy providing protection against deportation for young undocumented immigrants brought to the country as children. Trump, who announced in September he was ending the program, has said any deal protecting the so-called “Dreamers” should be paired with funding for a border wall and legislation that would reduce legal immigration.
If Democrats and Republicans do not reach a deal on spending by Dec. 8, the federal government could face a partial shutdown. Trump’s meeting with the Congressional leaders, which will also include Republicans House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell, is scheduled for 3 p.m.
As a reminder, the Dec. 8 deadline was set in a deal Schumer and Pelosi struck with Trump - against the wishes of Ryan and McConnell - to avoid a government shutdown and debt default in September. They agreed to fund the government at current levels and suspend the debt limit for three months.
As Bloomberg reminds us, since that deal was struck, Congress has focused mostly on a tax overhaul and has made little progress reaching a spending deal to keep the government open. Other issues have also piled up, including the fate of cost-sharing subsidies that help defray deductibles and coinsurance payments for low-income patients with Obamacare insurance policies. Trump stopped paying the subsidies.
The negotiations also include efforts to lift legislative caps on military spending, raise the debt limit, provide more funding for disaster assistance, and extend a children’s health insurance program and an intelligence surveillance program. Several of those issues face year-end deadlines and may end up in a huge spending plan that requires votes from both Republicans and Democrats.
The Trump administration does not want to include immigration as part of the year-end spending deal to keep the government open, White House spokeswoman Sarah Huckabee Sanders said on Monday. “We hope that the Democrats aren’t going to put our service members abroad at risk by trying to hold the government hostage over partisan politics, and attaching that,” Sanders told reporters on Monday.
Markets reacted favorably to the news, with stocks jumping on speculation that a meeting between the top Democrats and Republicans will be more productive than the "show meeting" between Trump and the democratic duo.
While stock euphoria is predictable, those curious if the government's shutdown odds are rising are urged to look at the Dec. 7-Dec. 21 Bill spread which, ominously, continues to blow out.