Lawmakers are still working to craft a short-term spending bill with less than a week before the federal government is set to shut down as it did in January.
A lack of progress on immigration was the main cause of the previous standoff, and neither Republicans nor Democrats appear any more willing to make significant concessions.
President Donald Trump told GOP lawmakers at a retreat in West Virginia on Feb. 1 that "we'll either have something that's fair and equitable and good and secure, or we're going to have nothing at all," on immigration.
Talks on Capitol Hill appeared to have stalled, according to the Wall Street Journal. Sen. John Thune, R-S.D., told reporters at the retreat that it may not be possible to include protections for DACA recipients – beneficiaries of an Obama-era program that shielded undocumented individuals brought into the country as children from deportation – in a larger, comprehensive immigration bill.
"My own view is—and I'm only speaking for myself here—is if we can solve DACA and border security, that may be the best that we can hope for," Thune told the Journal.
Some Democrats are even less optimistic than Thune.
"I am still hopeful, but I don't see this Congress and this President coming to an agreement that prevents the deportation of the Dreamers," said Rep. Luis Gutiérrez, D-Ill., in a statement following Trump's State of the Union address. "Dreamers themselves have said they do not want legal status if it comes at the expense of others who will suffer more as part of the bargain."
A report from S&P Global Ratings estimates that a shutdown could cost first quarter growth around $6.5 billion annualized, or 0.2 percentage points each week the government remains closed. Businesses are less inclined to invest during periods of uncertainty while households are likely to delay spending, and ongoing political gridlock may give consumers pause as they consider investing and spending, according to the report.
The threat of a shutdown looms as Congress is running out of time to raise the debt ceiling, and an unplanned spending cut resulting from a default could cut government spending by about 4% of annualized GDP. S&P added that lawmakers will likely strike a deal to fund the government by Feb. 8.
Meanwhile, the need to raise the debt ceiling is becoming increasingly urgent. The Congressional Budget Office warned on Jan. 31 that the Treasury would likely run out of funds in the first half of March. Previous estimates suggested that lawmakers had until late March or early April to increase the government's borrowing authority.
S&P Global Ratings and S&P Market Intelligence are owned by S&P Global Inc.
