Department of Homeland Security Inches Closer to Shutdown

Senate Majority Leader John Thune
Reuters
By Yuval Rosenberg and Michael Rainey

Happy Monday! Congratulations to the Seattle Seahawks and their former New York Jets stars! Here's what we're watching while waiting for some more Olympic curling action.

Department of Homeland Security Inches Closer to Shutdown

Senate Democrats sent their Republican counterparts draft legislation Sunday that would provide funding for the Department of Homeland Security for the rest of the fiscal year. DHS is currently operating on a short-term funding bill and faces the threat of a shutdown Friday night if Congress is unable to reach an agreement, in the form of either a full-year funding bill or a short-term continuing resolution that provides lawmakers with a few more weeks to come up with a viable plan.

In the wake of the Trump administration's violent immigration crackdown in Minneapolis and other cities around the country, Democrats are demanding significant changes within DHS in return for their cooperation on a funding bill. Last week, Democrats released a 10-point list of demands for changes, including a requirement for the use of judicial warrants, a limitation on sites where immigration enforcement can occur, an end to racial profiling, and the standardization of uniforms worn by federal agents.

Hope for progress: Senate Majority Leader John Thune said Monday that negotiators are talking, leaving open the possibility that a deal can be made. "There's a possibility something gets done here," Thune told reporters. "There are discussions going on between the White House and Senate Democrats."

Punchbowl News reported that the White House had sent a counteroffer on DHS reforms to Democrats late Monday afternoon, but senior lawmakers have yet to confirm the report.

Even with a possible counteroffer in play, the odds of reaching an agreement don't look particularly good, especially since time is short and lawmakers are just getting back to Washington, with an off-week scheduled starting February 16.

Democratic Sen. John Fetterman said Sunday that he isn't optimistic about making a deal in the next few days. "I absolutely would expect that it's going to shut down," Fetterman told Fox News. "We, the Democrats, we provided 10 kinds of basic things, and then the Republicans pushed back quickly saying that's a Christmas wish list, and that they're nonstarters. I truly don't know what specifically are the Democrats' red lines that it has to be, certainly not going to get all 10."

Democratic Sen. Chris Murphy said Monday that a shutdown seems likely. "Republicans need to stop telling us what they're against and talk to us about what they can vote for," he said, per CNN. "They've wasted a week while we've been diligently trying to move the negotiations and the talks forward, but you know, I wish Republicans were more serious about getting a budget. We're certainly, you know, on the verge of having the department shut down."

Murphy also noted that a shutdown would likely impinge upon ICE, even though the agency was given billions of dollars in the "One Big Beautiful Bill" that became law last summer. "It's not a simple on/off switch ... There are restrictions on BBB dollars. There's restrictions on appropriations dollars. Obviously, you know, the money in the appropriations bill is not peanuts. It's $10 billion for ICE," he said. "So, yeah, obviously, ICE has a lot of money right now, but it's not a simple thing for them to just decide to move all of their operations from one account to the other."

Republican Sen. Lindsey Graham said he saw no viable path for a deal right now and would be fine with a continuing resolution. "I don't see how we get there," he said. "They want to reform ICE, I want to get rid of sanctuary cities."

The bottom line: A short-term funding bill for DHS is probably the best-case scenario to avoid a shutdown at this point, but there are signs that Democrats may reject that path.

House Minority Leader Hakeem Jeffries said Sunday that he wants to see "dramatic changes" within DHS. "In our view, the ball is in the court right now of the Republicans," he told CNN. "Either they're going to agree to dramatically reform the way in which ICE and other immigration enforcement agencies are conducting themselves so that they're behaving like every other law enforcement agency in the country, or they're making the explicit decision to shut down the Coast Guard, shut down FEMA, and shut down TSA, and that would be very unfortunate."

Gateway Tunnel Funding Still Frozen as Court Battle Continues

Work on the $16 billion Gateway Tunnel remained halted on Monday even after a federal judge in New York on Friday granted a temporary restraining order blocking the Trump administration from freezing funds for the critical infrastructure project to build a much-needed new commuter rail tunnel between Manhattan and New Jersey.

The U.S. Department of Transportation asked for a stay of that court ruling while it appeals, and U.S. District Judge Jeannette Vargas reportedly gave the Trump administration until 5 p.m. on Thursday to see whether the Second Circuit Court of Appeals will overturn her order. The judge reportedly denied an administration request to delay her order requiring project funding to resume.

"Substantial delays could lead to the loss of up to 95,000 jobs," the judge reportedly wrote. "A prolonged shutdown is also predicted to result in the loss of $7.3 billion in annual GDP associated with completion of the Hudson River Project."

New York and New Jersey sued the Trump administration last month, claiming that its October move to freeze congressionally approved funding for the tunnel project was an illegal act of "political retribution" against Democratic-led states. The commission overseeing the project also sued, seeking to have more than $200 million in federal funds disbursed. The administration had said it was freezing the funds to review compliance with new Trump rules on diversity, equity and inclusion, though it reportedly offered other explanations as well.

"We took him to court, we won in court. He should be releasing the money as we speak," New Jersey Governor Mikie Sherrill said of President Trump in a video posted to social media on Monday. "Instead, he's still playing political games as people in the region suffer, as people can't get to work on time."

Trump reportedly offered to unfreeze the funding if Senate Democratic Leader Chuck Schumer would support renaming Washington Dulles Airport and New York's Penn Station in his honor, though the president denied proposing such a deal.

"Every day this drags on, millions of taxpayer dollars are wasted, contractors sit idle, union workers are sidelined, and the final cost of this project goes up for no reason," Schumer reportedly said in a statement Monday. "President Trump can end this today. Release the funds. Put workers back on the job. Restart Gateway now."

What's next: A court hearing is set for Wednesday.

Quote of the Day

"I'd say we're there now. I'm - I'm very proud of it."

− President Trump, accepting ownership of the economy in an interview with NBC News that was taped Wednesday and aired on Sunday.

After Trump repeated the familiar claim that he inherited a mess and fixed an affordability problem that was created by Democrats, "NBC Nightly News" anchor Tom Llamas asked Trump: "But at what point is it on you? At what point are we in the Trump economy?"

More than a year into his second term, the president said it's now a Trump economy.

Recent polls have found voters largely unhappy about the state of the economy and the president's handling of it, including a 59% disapproval rating in an NPR/Marist/PBS News survey released last week - the highest it's been in either of Trump's terms.

But in his interview with NBC, Trump said the economy is strong and he thinks 2026 will be even better, citing a wildly inflated estimate of $18 trillion in foreign investments coming into the country. Trump claimed that gross domestic product has grown by 5.6% and would have been higher if not for last year's government shutdown. The most recent report from the Commerce Department showed that GDP grew at an annualized rate of 4.4% in the third quarter of 2025. The first estimate of fourth-quarter growth is due out later this month.

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