Trump to lead spending talks

Leaders aim to prevent a shutdown

WASHINGTON — President Donald Trump and top congressional leaders are set to meet Thursday to discuss enacting a stopgap spending agreement in hopes of averting a government shutdown.

Facing a Friday deadline, Senate Minority Leader Charles Schumer, D-N.Y., and House Minority Leader Nancy Pelosi, D-Calif., said Monday that they accepted Trump’s invitation to meet at the White House with top Republican leaders the night before government funding dries up.

The meeting date puts pressure on GOP leaders to shore up support in their own ranks ahead of a vote on a plan to keep the government operating two more weeks as talks continue.

But the GOP will need Democratic votes to succeed, and potential opposition from Democrats and from conservatives in the GOP has left the pathway unclear for averting a closure just weeks before the

start of 2018.

Adding an obstacle, the roughly 30 members of the hard-right House Freedom Caucus planned a Monday evening meeting to discuss the budget clash as their leader said he was against a shortterm deal.

“We’re glad the White House has reached out and asked for a second meeting. We hope the President will go into this meeting with an open mind, rather than deciding that an agreement can’t be reached beforehand,” Schumer and Pelosi said in a statement.

Over the weekend, Republican leaders unveiled a two-week stopgap spending plan that would keep the government open through Dec. 22, but it is unclear whether there’s enough support among House Republicans to pass the spending plan on a party-line vote.

On Monday night, members of the Freedom Caucus briefly withheld support for a bill to formally launch negotiations with the Senate on a GOP tax plan, pressuring GOP leaders to set a new spending deadline for just after Christmas — instead of just before.

Freedom Caucus members ultimately helped Republicans approve the launch of formal tax negotiations, but leaders of the bloc said that House GOP leaders had agreed to keep talking about possibly setting the next deadline for Dec. 30.

Rep. Mark Meadows, R-N.C., who chairs the Freedom Caucus, said his group would rather see the next spending deadline fall after Christmas and asked GOP leaders to consider Dec. 30 — a date that would require lawmakers to interrupt their planned holiday recess. Meadows said he had extracted “a commitment to talk further.”

“Ultimately, there are no good decisions that get made three days before Christmas, ever,” Meadows said.

Meanwhile, Democrats are pressuring Republicans to resolve the legal status of young illegal immigrants brought to the U.S. as children, after Trump announced plans in September to end a Barack Obama-era program that grants many of them temporary legal status. Coming up with a new plan is a big sticking point for Democrats in this year’s spending talks.

Trump gave Congress until March to work out a new agreement on the program.

He expressed a desire to work with Democrats to extend the program, called Deferred Action for Childhood Arrivals, but he and Republicans want border protection money in return, and there have been no signs of progress.

The White House reached out to Democrats on Sunday, asking for a meeting that will include Senate Majority Leader Mitch McConnell, R-Ky., and House Speaker Paul Ryan, R-Wis. — a faceto-face encounter that was supposed to happen last week but was abruptly canceled after Trump tweeted his doubts about reaching a bipartisan deal to keep the government open and settle disputes on complex policy issues including immigration and health care.

Trump said that because Democrats skipped that meeting, they would be blamed for any government shutdown. Pelosi said on Twitter that Trump “now knows that his verbal abuse will no longer be tolerated.”

Despite the impasse, McConnell vowed Sunday on CBS’ Face the Nation that “there’s not going to be a government shutdown. It’s just not going to happen.”

White House spokesman Raj Shah and a spokesman for McConnell confirmed Thursday’s meeting. But no sooner was it announced than Meadows said he opposes a two-week agreement.

“Failing to see what it will accomplish that couldn’t be accomplished in the last 8 weeks,” he wrote in a text message.

DEMOCRATS’ LEVERAGE

Republicans enjoy control of Congress, but Democrats have in the past enjoyed significant leverage over federal spending debates. In the House, no bill setting the government spending plan has passed without at least 57 Democratic votes since Republicans recaptured control in 2011. In the Senate, no spending bill has passed without at least 23 Democratic senators in support since the GOP seized control in 2015, according to congressional records.

Privately, Democratic aides say that talks are continuing among senior staff members about spending levels and changes in immigration policy that could win over enough Democratic votes in both chambers.

The leading issue of concern in ongoing talks is exactly how much more money the federal government plans to spend in the coming years.

Currently, talks are focused on raising federal spending levels by anywhere from $180 billion to $200 billion over the next two years, according to aides granted anonymity to speak about ongoing discussions. Republicans are pushing for hundreds of billions more for Pentagon spending, but Democrats insist that must be matched with equal dollars for nondefense programs.

Because a two-year budget deal is expiring, the defense spending cap imposed by a 2011 bipartisan budget deal is due to drop in 2018 to $549 billion from this year’s $551 billion, while nondefense spending is to fall to $516 billion from $519 billion.

In their statement, Schumer and Pelosi said Monday that several other “key priorities here at home” also need to be resolved.

The Democratic list includes funding to combat opioid addiction; shore up certain pension plans; pay for major infrastructure projects; replenish the Children’s Health Insurance Program and cash-strapped community health centers; and help states ravaged by recent hurricanes and wildfires. Democrats also called on Republicans to work with them on a bipartisan immigration plan that protects the young illegal immigrants and enacts new border security measures.

In addition, some from both parties want to restore billions of dollars in federal payments to health insurers that Trump halted.

Republicans are likely to seek cuts in entitlement programs such as Medicaid and other “mandatory” spending like federal pensions.

Congressional leaders hope to use the two weeks afforded by a stopgap spending bill to work out an overall deal and attach it to another short-term spending bill that would be needed by Dec. 22 to continue federal spending into January.

McConnell said Sunday that a Children’s Health Insurance Program extension and disaster aid would be addressed in a spending bill before Dec. 22, but not immigration. He said Democrats are in an “untenable position” if they push the immigration issue to the point of a government shutdown.

Once overall spending caps are agreed upon, the congressional appropriations committees will spend weeks working out hundreds of line items and policy provisions for a final $1 trillion spending bill to be brought to a vote in January.

“There is a bipartisan path forward on all of these items,” the Democratic leaders said.

TAX-BILL TALKS

Separately, the House voted Monday night to begin a conference to work out the differences between the tax packages passed by the House and Senate on estate taxes, health care and a prized deduction for home mortgage interest, though Republican leaders are confident none of the differences are insurmountable.

After the tense standoff with the House Freedom Caucus, members of the group finally relented and backed the motion on taxes. The vote was 222-192, with all Democrats opposed. All four of Arkansas’ Republican representatives voted for the measure.

Republicans are trying to pass the biggest rewrite of the tax system in more than 30 years.

“We’re looking forward to getting a final bill to the president’s desk soon,” McConnell said Monday.

Both versions would cut taxes by about $1.5 trillion over the next decade while adding billions to the deficit. But they take different approaches.

“I don’t see anything here that is a deal-killer,” said Jon Traub, a former staff director for Republicans on the House Ways and Means Committee who is now at Deloitte Tax. “Having come this far, I don’t know why they wouldn’t be able to finish.”

The Senate bill passed by a thin 51-49 margin, so changes on any issue in the measure will have to be negotiated with the senators who care about that issue, said Marc Gerson, a former tax counsel for the Ways and Means Committee and now chairman of the law firm Miller & Chevalier.

“Overall, I think that the Senate bill is kind of the base text,” Gerson said.

Ryan named nine Republican lawmakers to be a part of the conference committee responsible for negotiating a final tax bill with GOP senators, according to a statement Monday.

House Ways and Means Committee Chairman Kevin Brady of Texas will serve as the conference chairman, and four members of his tax-writing panel will take part in the effort — Devin Nunes of California; Peter Roskam of Illinois; Diane Black of Tennessee, who also serves as House Budget Committee chairman; and Kristi Noem of South Dakota.

Other participants include

Rob Bishop of Utah and Don Young of Alaska, both members of the Natural Resources Committee, and Greg Walden of Oregon and John Shimkus of Illinois, who serve on the Energy and Commerce Committee.

Pelosi named the five Democratic members from the House. They are: Richard Neal of Massachusetts, Sander Levin of Michigan and Lloyd Doggett of Texas, all on the Ways and Means Committee; Raul Grijalva of Arizona, who serves on the Natural Resources Committee; and Kathy Castor of Florida, from the Energy and Commerce Committee.

Senate Majority Whip John Cornyn said the Senate would take “a couple of days” to appoint its members to the conference committee.

The House bill condenses the current seven personal income tax brackets to four: 12 percent, 25 percent, 35 percent and 39.6 percent. The Senate measure retains seven brackets but changes them and reduces the top bracket from 39.6 percent to 38.5 percent.

The Senate bill ends the reductions in 2026; they’re permanent in the House version.

The Senate bill has been criticized because the tax cuts for individuals are temporary while the tax cuts for corporations are permanent. Senators, however, had to make some of the tax cuts temporary to comply with Senate rules that prevented Democrats from blocking the bill.

On Sunday, Trump’s budget director, Mick Mulvaney, said he was comfortable with the Senate plan because he doubted that future congresses would let the tax cuts expire.

On deductions for home mortgage interest, the House version limits the deduction to interest paid on the first $500,000 of a loan for new home purchases. The Senate retains the current $1 million ceiling.

The House bill repeals both the individual and the corporate alternative minimum tax, which is designed to ensure that higher-earning people pay at least some tax. The Senate bill scales back the individual alternative minimum tax and keeps the corporate alternative minimum tax.