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'We're not in a good place': Here's why Democrats and Republicans can't agree to terms to stop another shutdown

Key Points
  • Lawmakers are struggling to find common ground on border security with only days to spare before funding for parts of the government runs out again.
  • Congress has until the end of Friday to avert another shutdown.
  • But the signs aren't promising, a Democratic aide tells CNBC: "We're not in a good place."
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Shutdown talks continue in Congress as deadline approaches

The scramble to avoid another government shutdown has stalled out as an end of Friday deadline looms for Congress to strike an agreement on border security.

Efforts to prevent the second partial funding lapse of the year have hit a roadblock, a Democratic aide told CNBC on Sunday. The Republican side also showed concerns. "The talks are stalled right now," Sen. Richard Shelby, R-Ala., the top GOP negotiator on a conference committee trying to hash out an immigration spending deal, told "Fox News Sunday."

An argument over how best to allocate border security money now threatens to reopen fresh wounds for the 800,000 federal workers who missed two paychecks during a record 35-day shutdown in December and January. Even as both major parties show no appetite for another closure, the ongoing dispute over immigration policy could stifle efforts to keep the government running.

Top appropriators plan to meet Monday afternoon as they try to salvage a last-minute deal, three sources told CNBC. Shelby, chairman of the Senate Appropriations Committee, House Appropriations Committee Chairman Nita Lowey, D-N.Y., Sen. Patrick Leahy, D-Vt., and Rep. Kay Granger, R-Texas, will meet.

The meeting is intended to be private, and the lawmakers are not expected to discuss details such as dollar amounts or the number of detention beds — the latest sticking point in talks. They see it as an opportunity to agree to move ahead with talks. The appropriators are already behind their desired timeline: one source said they originally hoped to release an agreement by noon Monday.

Ahead of the meeting, a House Democratic aide said some Republicans have floated the possibility of a continuing resolution to fund the Department of Homeland Security through the end of the fiscal year on Sept. 30. Democrats will not back such a spending plan, as they argue it would allow the Trump administration to put more money toward physical barriers and detention beds, the aide said.

President Donald Trump has appeared to back off his demand for a full $5.7 billion to construct his proposed border wall — which led to the previous funding lapse. However, he has still made the case for physical barriers on the U.S.-Mexico border, and will do so again during a rally Monday in El Paso, on Texas' western edge.

VIDEO1:2501:25
Shutdown talks stall as Friday deadline approaches

The last shutdown cost the economy $11 billion, according to a recent analysis from the nonpartisan Congressional Budget Office. That figure reflects lost output from federal workers, delayed government spending and reduced demand. The report estimated a hit of $3 billion, or 0.1 percent, to economic activity during the fourth quarter of 2018.

Democrats have offered $1.3 billion to $2 billion for physical barriers that Trump has demanded to secure the border from an influx of migrants, according to a Democratic source. In return, they wanted to cap the number of ICE detention beds for interior enforcement at 16,500. Currently there are about 20,700 beds.

Republicans have rejected that idea. Trump appeared to cite the proposal in contending Monday that "the Democrats do not want us to detain, or send back, criminal aliens!"

"This is a brand new demand. Crazy!" he wrote in a tweet.

In a series of tweets over the weekend, Trump also lashed out at what he said was the party's desire to "cap ... convicted violent felons to be held in detention."

Currently, ICE interior enforcement covers undocumented immigrants who are criminals detained at places other than the border, as well as undocumented immigrants who are detained but are not criminals.

Congressional Democrats argue that limiting beds forces ICE to focus on criminals, not just illegal immigration. However, Republicans say there are no reliable numbers on how many illegal immigrants are criminals, so they cannot support a cap. The difference has created the stalemate.

Speaking to reporters Monday, Immigration and Customs Enforcement deputy director Matt Albence argued the caps were "artificial" and "extremely damaging to the public safety of this country." He noted that the White House asked for 52,000 total detention beds in its most recent budget proposal. The Democrats' proposal is only for interior detention.

Rep. Mark Walker of North Carolina, former head of the Republican Study Committee, said he could support a higher cap on detention beds but did not provide a number. He called the Democrats' proposal a "curveball" and left open the possibility that the impasse could lead to shutdown.

"I always want to keep the government open. That should be your go-to position," he said. "But we have to put everything on the table."

As for the meeting among top negotiators from both parties this afternoon, Walker said it's time to "put up or shut up."

By the middle of the week, "things are going to get loose," he said. "And I think the president will do what he needs to do."

A potential solution would be a short-term continuing resolution to fund the government. However, neither party feels like a temporary spending measure would resolve the problem, and both appear reluctant to support the idea for now.

As Congress struggles to find common ground, Trump has threatened to declare a national emergency to divert funds for a wall without congressional approval. Even many Republicans have worried Trump would set a dangerous precedent by taking that step.

Still, Trump has repeatedly argued he has the authority to do so. In one tweet Sunday, the president cited comments from Rep. Tom McClintock, R-Calif., arguing for the legality of a national emergency.

The bottom line, according to the Democratic source, is that prospects for a border security breakthrough currently seem bleak and, when the current agreement lapses at the end of the week, America could face another shutdown.

"We're not in a good place," the person told CNBC.