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Homeland Security funding fight threatens spending deal

Welcome to another government shutdown week.

At midnight Friday, funding runs out for six big annual spending bills: State-Foreign Operations, Defense, Homeland Security, Labor-HHS, Legislative Branch and Financial Services-General Government. These bills cover roughly three-quarters of all federal discretionary spending.

Yet as of late Sunday night — following another unsuccessful call between aides to the Big Four congressional leaders and White House officials — there’s still no agreement on the second minibus package.

This is due to a dispute over funding for the Department of Homeland Security, which was always going to be a problem. The issue is a continuing resolution to fund DHS at the FY2023 funding level through Sept. 30. This is in lieu of a normal appropriations bill for FY2024. But the two sides can’t even reach a deal on that CR. The same issues remain — how much to spend on Border Patrol officers, how much for shelter and detention beds for undocumented migrants, and more.

The remaining five bills are essentially wrapped up. In fact, GOP and Democratic leaders thought they had an agreement on the overall minibus package heading into Sunday before the White House stepped in to make new demands on the Homeland CR.

Over the weekend, the White House warned Hill negotiators that President Joe Biden would veto the CR proposal. The Biden administration wanted more flexibility on “anomalies” to ensure they could shift around money to deal with new or evolving problems at the U.S.-Mexico border. Anomalies are “exceptions to the duration, amount, or purposes” for which appropriated funds may be used.

Additionally, the White House was asking for a pay equity provision for Transportation Security Administration workers. Meanwhile, Republicans are trying to get more money for beds and detention facilities for migrants.

The White House clearly thinks it has the upper hand here due to Republicans killing the bipartisan Senate border deal recently.

The stalemate means a (partial) government shutdown is back on the table. We still don’t expect it to happen, but there’s definitely a chance. A low-impact shutdown next weekend seems possible. And on the first weekend of the NCAA tournament!

We have two points to make here. The first is that it’s five-and-a-half months into FY2024. That a potential government shutdown is still being discussed is mind-boggling. The two sides have known what the funding level for FY2024 would be since last May when the White House and then Speaker Kevin McCarthy inked the Fiscal Responsibility Act. It’s taken more than 10 months just to get to this point.

Secondly, there’s never been a government shutdown anywhere near this late in the fiscal year since the 1976 changeover to the current federal schedule (Oct. 1 to Sept. 30.) We couldn’t find one past mid-January, per the Congressional Research Service.

Besides the DHS hangup, the other contentious issues have been resolved, we’re told.

For example, the two sides were able to find agreement on U.S. aid for the Palestinians. Currently, such aid is funneled through the United Nations Relief and Works Agency, or UNRWA. But after Israel alleged that a dozen UNRWA employees were involved in the Oct. 7 terror attacks by Hamas, the United States froze such aid.

Under the new bipartisan deal, U.S. aid to the Palestinians can’t be routed through UNRWA through at least March 2025, according to multiple GOP and Democratic sources. It must go through other organizations.

Timing issues: Thanks to this latest delay, Congress faces a real time crunch in avoiding a shutdown. House Republican leadership has vowed to give lawmakers 72 hours to review the minibus package before a floor vote.

If the bills are publicly released at some point today, the House can vote on Thursday — one day before the shutdown. That gives the Senate little time to clear this funding package. And Senate leaders have already said they expect this six-bill minibus to be more difficult to process than the first one.

All of which means that, at this point, Congress could stumble into a shutdown.

The politics: If you’re a hardline conservative, what does this deal give you? The House will effectively be locking Biden border policies for another six months with a CR. So they will vote no, of course. They were going to anyway, however.

The expected package of six spending bills will come to the floor as one vehicle. It’ll need 290 votes to pass. A healthy coalition of Democrats and Republicans will send the bill over the finish line.

Also this week: A group of national security-focused House Democrats is strategizing on different ways to force a Ukraine vote this week given the upcoming two-week recess. There are very few legislative options to do that, however, and their leverage will only dwindle after this week. It’s already a long shot.

We do expect House Minority Leader Hakeem Jeffries and other top House Democrats to up their pressure campaign on Speaker Mike Johnson over Ukraine as well. But again, Democrats are limited in what they can do.

— Jake Sherman, John Bresnahan and Andrew Desiderio

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