Trump Feels Shutdown Pressure From Economists, Nancy Pelosi
WASHINGTON — Shutdown pressure on President Donald Trump mounted Wednesday as House Speaker Nancy Pelosi called on him to delay his State of the Union address and his own economists acknowledged the prolonged standoff was having a greater economic drag than previously thought.
The White House did not immediately respond to the high-stakes move on the 26th day of the shutdown, as Trump and Democrats are at an impasse over Trump’s demands for $5.7 billion to build a wall along the Mexican border.
Pelosi is refusing money for the wall she views as ineffective and immoral; Democrats say they will discuss border security once the government has reopened.
“I am running out of ideas,” said Sen. Lindsay Graham, a South Carolina Republican who has been working on bipartisan strategies to resolve the shutdown.
“The Democrats are not going to negotiate with the government shut down,” he said. “People in the White House don’t like hearing that. I don’t know what to tell them other than what I actually think. If you’ve got a better idea … count me in.”
Shutdown Is Causing Greater Economic Harm Than Expected
Graham and Democratic Sen. Chris Coons of Delaware were organizing a bipartisan letter asking Trump to agree to the idea of reopening the government for three weeks to allow time for negotiations on border security. Trump rejected that approach earlier.
The letter, a copy of which was obtained by The Associated Press, states that the senators will make their best efforts to have “Congress develop and vote on a bipartisan agreement that addresses your request” for border money if he agrees to support legislation reopening the government for those weeks.
Seven Democratic lawmakers were in a bipartisan group that went to the White House on Wednesday to explore a solution.
The White House has been trying to peel lawmakers away from Pelosi but Trump’s invitations to Democrats earlier this week were declined. The seven Democrats, mostly freshmen, come from areas where Trump remains popular. Several did not back Pelosi as speaker. Yet there was prevailing pessimism that anything could break the logjam soon.
Even as administration officials projected confidence in their course, Trump’s economists indicated the shutdown is causing greater economic harm than expected.
Kevin Hassett, chairman of the White House Council of Economic Advisers, said Tuesday the shutdown is slowing growth more than predicted.
Economy Has Lost Nearly a Half-Percentage Point of Growth
An economic shift could rattle Trump, who has tied his political fortunes to the stock market and repeatedly stressed economic gains as evidence that his tax-cut package and deregulation efforts are succeeding. Economic optimism had already cooled somewhat as Trump’s trade fight with China shook the markets.
Hassett told reporters the White House is doubling its estimate of the strain on the economy of the shutdown, and now calculates that it is slowing growth by about 0.1 percentage points a week.
With the shutdown in its fourth week, that suggests the economy has lost nearly a half-percentage point of growth so far, though some of that occurred at the end of last year and some in the first quarter of this year. Hassett said the economy should get a boost when the government re-opens.
Previous White House estimates of the impact did not fully take into account the effect on people who work for private companies that contract with the government to provide services, Hassett said.
While the hit to the overall economy so far remains slight, economists foresee real damage if the shutdown drags into February or beyond.
Roughly 1 million government employees and contractors aren’t being paid. Travel plans are compromised by shuttered federal parks and airport delays. Some Americans trying to start small businesses face delays in obtaining the required tax identification number from the IRS.
President Shows No Signs of Backing Down
White House spokeswoman Sarah Huckabee Sanders told reporters that the economy remained strong.
“I know there has been some impact, but at the same time we’re focused on the long term economic principles the president has laid out,” she said.
The president, on a conference call with supporters Tuesday, showed no signs of backing down.
“We’re going to stay out for a long time, if we have to,” Trump said. He also suggested the partial shutdown, which has clogged airport security lines and shuttered federal agencies, was going smoothly.
Behind the scenes, though, the administration and its allies on Capitol Hill are warily eyeing the next payday. They hope to reach a resolution before a Tuesday deadline, when they’ll need to prepare the next round of paychecks for workers who have been seeing zeros on their pay slips.
Trump, who a week ago seemed intent on declaring a national emergency in order to build the wall, has turned his attention back to Congress as polling suggests he is taking much of the blame for the standoff.
On Tuesday, the White House had invited rank-and-file lawmakers to lunch with Trump at the White House as part of a strategy to build support from centrist Democrats and newly elected freshmen. But none of the House Democrats took Trump up on the offer.
Trump ended up lunching with a selection of lesser-known House Republicans.