Shutdown bites economy, US Coast Guard as Washington talks stall

A Coast Guard crew responds after a commercial fishing vessel capsizes off the coast of Newport, Oregon.
A Coast Guard crew responds after a commercial fishing vessel capsizes off the coast of Newport, Oregon.PHOTOS: US COAST GUARD/NYTIMES

WASHINGTON (REUTERS) - The United States economy is taking a larger-than-expected hit from the partial government shutdown, White House estimates showed on Tuesday (Jan 15), as contractors and even the Coast Guard go without pay and talks to end the impasse seemed stalled.

The shutdown dragged into its 25th day on Tuesday with neither President Donald Trump nor Democratic congressional leaders showing signs of bending on the topic that triggered it - funding for the wall Mr Trump promised to build along the border with Mexico.

Mr Trump invited a bipartisan group of members of Congress for lunch to discuss the stand-off but the White House said Democrats turned down the invitation.

Nine House Republicans - none of whom are involved in party leadership - attended the private lunch.

House Democratic leaders said they did not tell members to boycott Mr Trump's lunch but had pressed those invited to consider whether the talks would be productive or be a photo-op for Mr Trump.

"We are unified," House Majority Leader Steny Hoyer told reporters on Tuesday morning.

Meanwhile, a bipartisan group of senators has been exploring solutions.

Senator Lisa Murkowski, a Republican participant, told reporters in a Capitol hallway that the group had "momentum" but gave no other details.

Senator Joe Manchin, a Democratic member of the group, said "anything can be part of the negotiations".

"There's a group - everybody's talking. Everybody wants to find a way out of this," he said.

"Never in my political life have I ever seen the workers and the citizens that are dependent upon the services be used as a pawn," Mr Manchin said.

Mr Trump is insisting Congress shell out US$5.7 billion (S$7.7 billion) for wall funding as about 800,000 federal workers go unpaid during the partial shutdown.

SEEKING COAST GUARD FUNDING

Homeland Security Secretary Kirstjen Nielsen said she was working with the White House and Congress to pass legislation to fund the Coast Guard.

While the Pentagon is not affected by the shutdown, the Coast Guard budget is part of Ms Nielsen's department.

"Like the other branches of the US military, active duty #USCG should be paid for their service and sacrifice to this nation," she wrote on Twitter.

The Trump administration had initially estimated the shutdown would cost the economy 0.1 percentage point in growth every two weeks that employees were without pay.

But on Tuesday, there was an updated figure: 0.13 percentage point every week because of the impact of work left undone by 380,000 furloughed employees as well as work left aside by federal contractors, a White House official said.

The partial shutdown is the longest in US history and its effects have begun to reverberate across the country.

Longer lines have formed at some airports as more security screeners fail to show up for work while food and drug inspections have been curtailed, and farmers, stung by recent trade spats, have been unable to receive federal aid.

Speaking on CNBC, Delta Air Lines chief executive officer Ed Bastian said the partial shutdown will cost the airline US$25 million in lost revenue in January because fewer government contractors are travelling.

Mr Trump ran for office in 2016 on a promise to build a wall to stop illegal immigration and drug trafficking. He had toyed with the prospect of declaring a national emergency to circumvent Congress to secure the funding, but this week backed off from that idea, which would attract a court challenge.

Democrats, who took over the US House of Representatives this month, have rejected the border wall but back other border security measures. They also have insisted the government be fully open before negotiations occur.

House Democrats have passed a number of Bills to fund the roughly one-quarter of federal operations that have been closed, but Senate Majority Leader Mitch McConnell, a Republican, has said the chamber will not consider legislation that Mr Trump will not sign into law.

Mr McConnell, who has mainly stayed out of the public fray on the shutdown, on Tuesday accused Democrats of "acrobatic contortions" to avoid negotiating on the shutdown.