House Republicans Reject Senate Deal to End DHS Shutdown

Johnson called the Senate bill a 'joke.'
Reuters
By Yuval Rosenberg and Michael Rainey

Good evening! Let's get you caught up on an eventful Friday.

House GOP Rejects Senate DHS Funding Bill; Trump Directs TSA to Be Paid

Speaker Mike Johnson and House Republicans on Friday rejected a Senate-passed plan to fund most of the Department of Homeland Security, delivering a stunning rebuke of a bipartisan bill to end the six-week-long shutdown that has left Transportation and Security Administration workers without pay and snarled security lines at U.S. airports.

Trump orders TSA workers to be paid: With no clear path left for Congress to end the funding fight before lawmakers depart for a two-week recess, President Trump directed DHS to pay TSA employees during the shutdown. Those workers were set to miss a second full paycheck on Friday.

In a presidential memo, Trump said that the country's air travel system "has reached its breaking point" and called it "an unprecedented emergency situation," casting blame on Democrats.

"As President of the United States, I have determined that these circumstances constitute an emergency situation compromising the Nation's security," Trump said. His memo directed DHS and the head of the White House Office of Management and Budget "to use funds that have a reasonable and logical nexus to TSA operations." The White House reportedly clarified later that the funding will come from last year's One Big Beautiful Bill Act. DHS said in a statement that TSA had begun the process of paying workers and that officers should start seeing paychecks as early as Monday.

Johnson calls Senate bill 'a joke': Trump's executive action may help stop the growing chaos at U.S. airports, but it leaves unresolved the larger 42-day-long shutdown that appeared to maybe, possibly be nearing an end as of Friday morning. Instead, with House conservatives firmly opposed to the lack of immigration enforcement funding in the bipartisan Senate-passed bill, Johnson refused to bring that measure to a vote.

The Senate plan would fund DHS agencies except for Immigration and Customs Enforcement and parts of Customs and Border Protection. As an alternative, Johnson offered up a partisan eight-week bill to reopen all of DHS, including the enforcement operations that Democrats insisted they would not fund without reforms.

"The Republicans are not going to be any part of any effort to reopen our borders or to stop immigration enforcement," a heated Johnson told reporters Friday afternoon. "This gambit that was done last night is a joke. I'm quite convinced that it can't be that every Senate Republican read the language of this bill."

The House Republican rejection came even though senators had already left for a two-week recess after passing their bill shortly before 2:30 a.m. - and even though the House alternative likely has no chance of passing the Senate, where 60 votes would be required. Senate Minority Leader Chuck Schumer, who took something of a victory lap after the Senate passed its bill, even though it did not include the immigration enforcement reforms that Democrats had been demanding, said that the 60-day House stopgap "is dead on arrival in the Senate, and Republicans know it."

Republican divisions on display: Johnson's biting rejection of the Senate bill highlighted a sharp split between Republicans in both chambers, with some House conservatives calling for John Thune to be removed from his role as Senate majority leader.

Asked why he was rejecting a plan engineered by Thune, Johnson rejected the premise, instead blaming Schumer and Senate Democrats. Still, the fact remained that the Senate, under a Republican majority and Thune's control, passed its plan via unanimous consent without any GOP objection. The bill would reopen the Federal Emergency Management Agency, the Coast Guard and TSA, but would not provide funding for ICE or Customs and Border Protection, though those agencies still have billions of dollars in funding for continued operations from the Republican reconciliation bill enacted last year.

Johnon said that he had spoken with Trump and that the president understands what House Republicans are doing and why. Trump reportedly had indicated that he would sign the Senate bill, but in an interview with Fox News later in the day, he said that the legislation "wasn't good" and "wasn't appropriate" because it did not fund law enforcement.

"In my opinion, you can't have a bill that's not going to fund ICE," Trump said.

What's next: The House is slated to vote on the eight-week funding bill as soon as tonight, but that plan reportedly faces some skepticism even among Republicans, and if it does pass, senators have already left town, making the next steps unclear.

The bottom line: Barring another extraordinary twist tonight, it looks like the DHS funding fight is going to stretch into mid-April at least.

Consumer Sentiment Falls Near Record Low

The University of Michigan's measure of consumer sentiment fell to a three-year low in March, with the index slipping to 53.3, down from 56.6 in February.

Joanne Hsu, director of the survey, said that consumers are worried they will be paying more for goods, including gasoline. Short-term inflation expectations rose four-tenths of a percentage point to 3.8%. "The persistence of high prices continues to be the dominant factor for consumer views of the economy, with 47% of consumers spontaneously noting that prices are currently eroding their personal finances," she said in a statement.

The drop in sentiment was particularly noticeable among higher-income households. "Consumers with middle and higher incomes and stock wealth, buffeted both by escalating gas prices and volatile financial markets in the wake of the Iran conflict, exhibited particularly large drops in sentiment," Hsu said.

Heather Long, chief economist at Navy Federal Credit Union, noted that there have been only three lower readings on the sentiment index: during the longest government shutdown in history last fall, following President Trump's announcement of his "liberation day" tariffs last spring, and during the Covid-era surge in inflation in 2022.

"Americans are struggling to navigate all this uncertainty, along with price hikes and a frozen job market," Long said. "Even wealthier consumers are turning gloomier this time.

 

Quotes of the Day: Dueling Outlooks on the Iran War

"Markets are overreacting to what will likely be a 4- to 6-week period of volatility, which will ultimately result in 50 years of stability in oil markets, supply chains and geopolitics."

– Torsten Slok, chief economist at Apollo Global Management. "The Gulf region will become more stable and even more closely integrated with the global economy," Slok said in a blog post Friday. "For the Fed, the rise in inflation due to higher oil prices is temporary; once the conflict is over, Fed cuts will be priced in again, and long rates will decline."

"Recession risks are very high, and unless the hostilities are coming to an end now, the president figures out a way to stand down, declare victory and move on, and Iranians follow suit, I think recession is more than likely by the second half of the year."

– Mark Zandi, chief economist at Moody's Analytics. Appearing on CNBC Wednesday, Zandi noted that the unemployment rate is rising and inflation is clearly moving higher, and Moody's now estimates a 48.6% chance of recession in the next 12 months.

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