Democrats Lay Out Their Demands for ICE as Partial Shutdown Looms

Schumer laid out three major demands.
Reuters
By Yuval Rosenberg and Michael Rainey

Good evening. With a partial government shutdown looming in just a couple of days, Democrats today laid out their demands for reforms to Immigration and Customs Enforcement as lawmakers try to find a way to resolve intractable differences over a Homeland Security funding bill. Here's your evening update.

Schumer Lays Out Three Democratic Demands on DHS Funding

The federal government is edging closer to a partial government shutdown this weekend as Democrats and Republicans continue to differ on Department of Homeland Security funding and how best to address concerns about the Trump administration's aggressive immigration enforcement tactics following weeks of unrest and a pair of high-profile deadly shootings by federal agents in Minneapolis.

Senate Minority Leader Chuck Schumer on Wednesday laid out three major reforms that Democrats are demanding as they look to restrain Immigration and Customs Enforcement operations and avoid a partial government shutdown by passing a package of bills to fund the government through September. "After talking with my caucus, Senate Democrats are united on a set of common-sense and necessary policy goals that we need to rein in ICE and the violence," Schumer said.

  • First, Democrats want an end to roving patrols by immigration officers. "We need to tighten the rules governing the use of warrants and require ICE's coordination with state and local law enforcement," Schumer said.
  • Second, Democrats are seeking to enforce accountability by establishing a uniform code of conduct for federal agents. "Federal agents should be held to the same use-of-force policies as apply to state and local law enforcement and be held accountable when they violate these rules." Schumer added that independent investigations are needed to help enforce those policies.
  • Third, Schumer said, "we want masks off, body cameras on" for federal agents. He said law enforcement officers should also have to carry proper identification.

"These are commonsense reforms, ones that Americans know and expect from law enforcement," Schumer said. "If Republicans refuse to support them, they are choosing chaos over order, plain and simple. They are choosing to protect ICE from accountability over American lives."

Schumer again called on Senate Majority Leader John Thune to separate out the Homeland Security funding bill from five other bills in the $1.3 trillion spending package approved by the House last week. Democrats support the five other bills, which include funding for the Pentagon and the Departments of State, Treasury, Health and Human Services, Labor, Education, Transportation, Housing and Urban Development and other related agencies. All six bills were negotiated on a bipartisan basis, but Democratic concerns over funding DHS reached a breaking point after federal agents shot and killed 37-year-old Alex Pretti in Minneapolis last Saturday.

Breaking up the bill would be complicated, risky: Thune told reporters Wednesday afternoon that he was waiting for Democrats to specify their demands, but he warned that reopening the six-bill package sent over by the House and forcing lawmakers in the other chamber to vote on the spending measures again would be problematic.

"It's really important, if possible, to do it here, not to have to send it back to the House of Representatives, where the future of an appropriations package I think would be somewhat uncertain," he said.

The House is out this week, and Republicans have taken no steps to have lawmakers return early from their recess. But House conservatives have made clear they oppose amending the DHS bill and would seek their own demands if the spending package comes back to them. "I have my own list if DHS is opened back up. Beginning with no sanctuary city funding," Rep. Chip Roy, a House Freedom Caucus member, wrote in a post on X.

Ripping apart the House-passed package would likely also involve some procedural complications in the Senate, where some Republicans are sure to oppose stripping out the DHS funding bill.

Thune added that a partial shutdown would be harmful and that shutting down the Department of Homeland Security would affect important agencies, including the Federal Emergency Management Agency just as it is responding to weather-related disasters affecting much of the country. He noted that a partial shutdown wouldn't impede ICE, which received a massive funding infusion as part of last year's Republican reconciliation bill. And he pointed out that the DHS funding bill now before the Senate would actually provide less money for ICE and some other areas of Democratic concern than current spending levels do.

Thune suggested that Democrats should be talking to the White House and said the Trump administration is willing to negotiate over how to proceed. But Schumer dismissed administration offers so far. "The White House has had no specific good, concrete ideas," the Democratic leader told reporters.

Democrats have also insisted that any fixes should be passed into law by Congress, saying they simply can't trust administration promises.

The bottom line: It's not clear whether the two sides can agree on a path forward ahead of the Friday night funding deadline. A test vote on the six-bill funding package is set for Thursday.

Fed Holds Steady on Rates as Consumers Remain Resilient

At the conclusion of its first meeting of the year on Wednesday, the Federal Reserve announced that it is maintaining its benchmark interest rate at its current level in a range between 3.5% and 3.75%.

The decision to hold steady for the first time since July was widely expected, but the vote on the 12-member FOMC was not unanimous. Stephen Miran and Christopher Waller, two board members appointed by President Trump, voted to cut the Fed funds rate by a quarter of a percentage point. Trump has been pressuring the Fed to lower rates.

In a statement explaining its decision, the rate-setting Federal Open Market Committee said the U.S. economy has been expanding "at a solid pace." Job growth continues to be modest, while inflation remains "somewhat elevated." The risk factors to the Fed's dual mandate of stable prices and maximum employment appear to be roughly in balance.

Powell speaks: Fed Chair Jerome Powell told reporters that the economy entered 2026 on a "firm footing" and the outlook has improved in recent months. Although still soft, the labor market has shown signs of stabilizing, helping to relieve the tension between solid growth and weak hiring.

"We see the current stance of monetary policy as appropriate to encourage progress toward both our maximum employment and 2% inflation goals," Powell said.

Although inflation remains elevated, with a 12-month core inflation reading of 3%, Powell attributed much of the excess price pressure to the tariffs Trump has imposed on trading partners around the world. If you ignore the tariff effects, core inflation is just slightly above the 2% target rate, Powell said, adding that the tariff effects will likely subside in a few months.

A long pause? Some analysts speculated that the Fed could sit on interest rates for a while. "The Fed is likely on an extended pause with strong activity data and signs of stabilization in the labor market suggesting little need to take out further insurance," said Kay Haigh, global co-head of fixed income and liquidity solutions at Goldman Sachs Asset Management, per CBS News.

Market strategist Peter Boockvar said the Fed could hold rates steady at least until summer, when a new Fed chief will take over. "I'll argue again, unless the rate of inflation takes another leg down and/or the unemployment rate moves much higher from here, Jay Powell is done cutting interest rates at his final two meetings and his colleagues seem to agree at least for now," Boockvar said in a research note.

A message for the next Fed chief: Powell refrained from commenting on his current struggle with Trump, who has put extreme pressure on the Fed to slash rates. But Powell did offer some advice for the next head of the central bank, who will take over in May.

"Honestly, I'd say a couple of things," Powell said in response to a question on the issue. "One is, stay out of elected politics. Don't get pulled into elected politics. Don't do it."

Powell added that it's important for the Fed chief to talk to lawmakers. "If you want democratic legitimacy, you earn it by your interactions with our elected overseers, and so it's something you need to work hard at, and I have worked hard at it," he said.

Quote of the Day

"Among the reasons the 2025 filing season went well was that the IRS had its largest workforce in many years and faced no major tax law changes that required implementation during the filing season. Entering 2026, the landscape is markedly different. The IRS is simultaneously confronting a reduction of 27% of its workforce, leadership turnover, and the implementation of extensive and complex tax law changes mandated by the [One Big Beautiful Bill] Act, many of which apply retroactively and require significant IRS programming, guidance, changes to tax forms and instructions, and taxpayer education."

– National Taxpayer Advocate Erin M. Collins, from her annual report to Congress, released Wednesday.

Collins said she expects most taxpayers to file their taxes and receive refunds "without delay" this year, in a process that will be "seamless." But she added that success for the IRS will hinge upon how well the agency can help filers who experience problems.

The 2026 tax filing season began on Monday. The IRS is entering the new season with far fewer employees, after seeing its headcount fall from about 102,000 at the start of 2025 to about 74,000 in 2026 following an aggressive campaign by the Trump administration to shrink the agency.

Number of the Day: 14,938

The U.S. Capitol Police says it investigated nearly 15,000 "threat assessment cases" last year - that is, troubling behavior or communications directed at members of Congress, their families, staff, and the Capitol complex. Such threats have risen for three years in a row and jumped 58% from 2024 to 2025.

The latest numbers came out Tuesday, before Rep. Ilhan Omar was sprayed with an unidentified liquid, later reported to be apple cider vinegar, at a town hall event in Minneapolis last night.

"Members of Congress of both political parties receive a wide range of threats and concerning statements, which can be sent through the mail, e-mail, telephone, and social media," the Capitol Police said in a news release this week. "People continue to have a false sense of anonymity online, which has resulted in more investigations during the past several years. Decreasing violent political rhetoric is one of the best ways to decrease the number of threats across the country."

Fiscal News Roundup

Views and Analysis