Welcome to The Hill’s Morning Report and happy Tuesday! Our newsletter gets you up to speed on the most important developments in politics and policy, plus trends to watch, co-created by Jonathan Easley and Alexis Simendinger. ( CLICK HERE to subscribe! ) On Twitter, find us at @joneasley and @asimendinger.

Hill.TV’s “Rising” program, starting at 8 a.m., features a look at the legal status of the Affordable Care Act with Avik Roy, president of the Foundation for Research on Equal Opportunity; a discussion about the climate change gathering in Poland with Jake Schmidt of the Natural Resources Defense Council; and a sit-down with opinion columnist Elizabeth Bruenig of The Washington Post. http://thehill.com/hilltv

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It’s four days and counting until a possible partial government shutdown.

Polling shows the public does not like Washington’s funding impasses and that the party responsible will suffer negative political consequences if some of the government runs out of money before the holidays.

President Trump Donald John TrumpBiden on Trump's refusal to commit to peaceful transfer of power: 'What country are we in?' Romney: 'Unthinkable and unacceptable' to not commit to peaceful transition of power Two Louisville police officers shot amid Breonna Taylor grand jury protests MORE, believing he has leverage with Democrats, says he’ll be proud to own the shutdown. He doesn’t seem worried that demanding billions more for a border wall could lead to unpleasant political fallout.

If parts of the government run out of funds before the end of the year, the result would be different from what most Americans recall from previous shutdowns.

First, there does not appear to be an intense Washington scramble to reach a deal, at least not yet.

The full House won’t be in session until Wednesday, little more than 48 hours before the deadline Congress and the president set. Departments and agencies are briefing federal employees on procedures to close down parts of the government, delay pay, identify essential personnel and furlough some government workers. Democrats are preparing for a prolonged ordeal through the holidays ( The Hill ).

Republicans, including those who reassured the country for weeks that the government would keep operating and resolve any spending impasse, now believe Trump has backed himself into a corner. Outwardly, they appear content to allow the president to fashion a compromise — or not.

As Sen. John Cornyn John CornynThe Hill's Campaign Report: GOP set to ask SCOTUS to limit mail-in voting Liberal super PAC launches ads targeting vulnerable GOP senators over SCOTUS fight Senate GOP faces pivotal moment on pick for Supreme Court MORE (R-Texas) told reporters last week, the logic eludes some in the president’s party.

"Perhaps the president has a strategy. I heard him talk about getting the military to build some of those physical barriers. That just remains to be seen. But I can tell you that right now, I don't see the benefits of a shutdown strategy." — Cornyn, Dec. 12 ( Houston Chronicle )

The Hill : GOP frets as Trump shutdown looms.

The Hill : Trump, Dems dig in over shutdown.

Another difference from past funding fights: Approximately 75 percent of the government has the necessary appropriations for fiscal 2019 through legislation Trump already approved, so a shutdown would impact only about a quarter of federal operations.

Still, that would leave hundreds of thousands of workers at key agencies without paychecks over Christmas. The Department of Homeland Security (DHS), which manages the border and provides security and protection for the president, is home to parts of the executive branch that would be deemed essential, which means some employees would work without pay, even without funding after Friday. Hundreds of thousands more employees would be furloughed.

News outlets including Government Executive as well as lobbying groups have identified the departments and agencies that could shut down before Christmas, if Congress and the president can’t come up with a temporary or lasting fix:

In addition to DHS — Agriculture, Commerce, Housing and Urban Development, Interior, Justice (the special counsel continues its investigation), State, Transportation, Treasury, the Environmental Protection Agency and other agencies.

Bloomberg : Trump is said to oppose a short-term spending measure to avert a shutdown.

Bloomberg : One GOP lawmaker wants Treasury to issue special savings bonds as a way to fund the border wall.

Trump is scheduled to visit his resort in Mar-a-Lago this weekend, although it’s unclear whether he’ll follow through with the trip if there’s a partial government shutdown.



LEADING THE DAY





POLITICS: Tennessee Republican Sen. Lamar Alexander Andrew (Lamar) Lamar AlexanderGraham: GOP has votes to confirm Trump's Supreme Court nominee before the election The Hill's Morning Report - Sponsored by Facebook - Washington on edge amid SCOTUS vacancy This week: Supreme Court fight over Ginsburg's seat upends Congress's agenda MORE, 78, first elected in 2003 and chairman of the Senate Health, Education, Labor and Pensions Committee, announced Monday he will not seek reelection when his term is up in 2020.

Alexander joins 84-year-old Sen. Orrin Hatch Orrin Grant HatchBottom line Bottom line Senate GOP divided over whether they'd fill Supreme Court vacancy MORE (R-Utah), Arizona Republican Sen. Jeff Flake Jeffrey (Jeff) Lane FlakeHow fast population growth made Arizona a swing state Jeff Flake: Republicans 'should hold the same position' on SCOTUS vacancy as 2016 Republican former Michigan governor says he's voting for Biden MORE and Tennessee colleague Sen. Bob Corker Robert (Bob) Phillips CorkerHas Congress captured Russia policy? Tennessee primary battle turns nasty for Republicans Cheney clashes with Trump MORE (R) in voluntarily departing the Senate during Trump’s first term.

Alexander’s decision will make the map a little more difficult for Republicans in two years, although the GOP will likely be favored to hold his seat. Still, Senate Republicans will be defending about 22 seats, including in Colorado and Maine, which Democratic presidential nominee Hillary Clinton Hillary Diane Rodham ClintonDemocratic groups using Bloomberg money to launch M in Spanish language ads in Florida The Hill's Campaign Report: Presidential polls tighten weeks out from Election Day More than 50 Latino faith leaders endorse Biden MORE won in 2016 ( The Hill ).

> Lawmakers are still scrambling to analyze the fallout after a federal judge in Texas ruled ObamaCare unconstitutional. It likely means that former President Obama’s signature legislative achievement is headed for another test at the Supreme Court.

Democrats are already vowing to hold hearings on the matter when they gain the House majority next year ( The Hill ). Republicans, who declined to fulfill their promise to repeal and replace the law when they had full control of Congress, are keeping their distance from the ruling, wary of the political backlash around a law that has gained in popularity since Obama left office ( The Hill ). And a group of Democratic attorneys general began the process Monday of appealing the recent court order that struck down ObamaCare ( The Hill ).

More from politics and campaigns … Coalition of liberal grass-roots groups call on Pelosi to appoint progressives to key committees ( The Hill ) … North Carolina Republicans call on a state board to certify House race, unless it can prove fraud changed results in November ( The Hill ).

***

INVESTIGATIONS: Trump’s former national security adviser Michael Flynn will be sentenced in federal court today.

Flynn pleaded guilty to lying to the FBI about his contacts with the Russian ambassador during the presidential transition.

But Flynn cooperated extensively with the special counsel probe, and Robert Mueller Robert (Bob) MuellerCNN's Toobin warns McCabe is in 'perilous condition' with emboldened Trump CNN anchor rips Trump over Stone while evoking Clinton-Lynch tarmac meeting The Hill's 12:30 Report: New Hampshire fallout MORE has recommended he face the minimum sentence. It’s possible that Flynn will get off without serving any jail time.

Still, in the days since Mueller’s sentencing memo, Flynn has fanned the flames around the idea that he was duped into lying by federal prosecutors, who capitalized by squeezing him to turn on the administration.

It will be interesting to see if the judge takes those allegations into consideration on Tuesday, one way or the other.

The Hill : Flynn sentencing marks key moment in Mueller investigation.

The Associated Press : Run-up to Flynn’s sentencing tinged with unexpected drama.

As Flynn’s legal case wraps up, another is just beginning for one of his associates, Bijan Kian.

Kian was indicted on charges of failing to register as a foreign agent for work he did on behalf of the Turkish government ( The Associated Press ).

You can read the federal indictment HERE .

It was thought that Flynn might face similar charges but his cooperation with the special counsel might have helped him out on that one.

The Hill : Five things to know about Turkey and Flynn.

Elsewhere, former FBI Director James Comey James Brien ComeyDemocrats fear Russia interference could spoil bid to retake Senate Book: FBI sex crimes investigator helped trigger October 2016 public probe of Clinton emails Trump jabs at FBI director over testimony on Russia, antifa MORE was quizzed in private by GOP lawmakers on Monday about allegations of political bias at the agency and the origins of the investigation into the Trump campaign.

When reporters asked Comey later whether he has confidence in acting Attorney General Matthew Whitaker, he replied, "no comment" ( CBS News ). During a November interview, Comey said Whitaker “may not be the sharpest knife in our drawer,” adding he knew him “casually” from their time in the Justice Department ( WGBH ).

It’s likely the last time House Republicans will get a shot at a key figure in the investigation, with Democrats taking the majority in January. The bitter feelings flow both ways.

“Republicans used to understand that the actions of a president matter, the words of a president matter, the rule of law matters, and the truth matters. Where are those Republicans today. At some point, someone has to stand up and in the face of fear of Fox News and fear of their base, fear of mean tweets, stand up for the values of this country and not slink away into retirement.” — Comey after meeting with lawmakers

The New York Times : Tech companies dragged feet on Russian interference, report says.

IN FOCUS/SHARP TAKES





WHITE HOUSE & ADMINISTRATION: Lawmakers, administration officials and outside advisers have tried without success to discourage the president from publicly commenting on decisions made by the independent Federal Reserve, which today begins its final meeting of the year.

On Monday, Trump blasted the nation’s central bank via Twitter, advising against an interest rate hike many Fed watchers say they expect will be announced on Wednesday ( The Hill ).

“It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike. Take the Victory!” — Trump

Reuters : Growth fears grip world stock markets before Fed meeting.

The New York Times : There is increasing concern that the central bank is risking a return to recession.

> Agriculture: The president also turned to Twitter to announce he’s making good on his promise to deliver billions of dollars in additional bailouts for U.S. farmers and ranchers impacted by retaliatory tariffs levied as a result of U.S. trade policies ( The Washington Post ).

“Today I am making good on my promise to defend our Farmers & Ranchers from unjustified trade retaliation by foreign nations. I have authorized Secretary Perdue to implement the 2nd round of Market Facilitation Payments. Our economy is stronger than ever – we stand with our Farmers!” — Trump

> Interior: The president says he'll announce his pick to replace Secretary Ryan Zinke Ryan Keith ZinkeTrump extends Florida offshore drilling pause, expands it to Georgia, South Carolina Conspicuous by their absence from the Republican Convention Trump flails as audience dwindles and ratings plummet MORE this week. David Bernhardt, Zinke's deputy and the lead official on numerous major department priorities, is thought to be the top candidate. Other Republicans seen as potential candidates: outgoing Sen. Dean Heller Dean Arthur HellerOn The Trail: Democrats plan to hammer Trump on Social Security, Medicare Lobbying World Democrats spend big to put Senate in play MORE (Nev.), outgoing Wisconsin Gov. Scott Walker, outgoing Rep. Raúl Labrador (Idaho), Rep. Rob Bishop Robert (Rob) William BishopOVERNIGHT ENERGY: California seeks to sell only electric cars by 2035 | EPA threatens to close New York City office after Trump threats to 'anarchist' cities | House energy package sparks criticism from left and right House energy package sparks criticism from left and right OVERNIGHT ENERGY: EPA head questions connection of climate change to natural disasters | Pebble Mine executives eye future expansion in recorded conversations | EPA questions science linking widely used pesticide to brain damage in children MORE (Utah) and former Rep. Cynthia Lummis Cynthia Marie LummisChamber of Commerce endorses McSally for reelection Cynthia Lummis wins GOP Senate primary in Wyoming Chamber of Commerce endorses Ernst for reelection MORE (Wyo.) ( The Hill ). … Labrador eyed for Interior ( Bloomberg ).

> Immigration: A second federal judge on Monday temporarily blocked the Trump administration from enforcing a ban on asylum for people who cross the southern border illegally ( The Hill ). … Three immigrants held by U.S. Immigration and Customs Enforcement in Southern California detention centers have sued the Department of Homeland Security, claiming they’re being denied proper access to lawyers while they fight the government’s attempt to remove them ( Bloomberg ).





The Morning Report is created by journalists Jonathan Easley jeasley@thehill.com & Alexis Simendinger asimendinger@thehill.com. Suggestions? Tips? We want to hear from you! Share The Hill’s reporting and newsletters, and encourage others to SUBSCRIBE!

OPINION





The three biggest immigration issues Congress needs to tackle, by Michael Wildes, opinion contributor, The Hill. https://bit.ly/2PKiMt1

Government shutdowns tend to increase government spending, by economist LeRoynda Brooks, opinion contributor, The Hill. https://bit.ly/2SOxqkQ





WHERE AND WHEN





The Senate convenes at 10 a.m. to continue consideration of a criminal justice reform bill.

The House is in pro forma session today. House members are due to return Wednesday.

The president hosts a roundtable discussion on a report from the Federal Commission on School Safety.

Vice President Pence, who leads the president’s Space Council, is at Cape Canaveral, Fla., to witness a U.S. Air Force satellite launch.

The Federal Open Market Committee begins a two-day meeting that wraps up with a press conference on Wednesday. Economists expect the central bank to raise rates for the fourth time in 2018. Analysts are all ears for the Fed’s economic outlook ( The Wall Street Journal ).

ELSEWHERE





> China: President Xi Jinping delivers a high-profile address Tuesday in Beijing and seeks to solidify his reputation as a reformer ( Bloomberg ).

> United Kingdom: Prime Minister Theresa May, who postponed a vote on a Brexit plan earlier this month because it did not have sufficient votes from her own Conservative Party in parliament, said Monday the vote has been rescheduled for the week of Jan. 14. The British cabinet meets today to prepare for a disorderly exit from the European Union ( The Associated Press ).

> Economy: Americans are increasingly more pessimistic about the direction of the economy, with the number of people expecting things to get worse over the next year at its highest level since 2013 ( Bloomberg ). The stock market is experiencing its most dismal December start since 1980 ( MarketWatch ). Meanwhile, burnout and stress among employees are leading some employers to experiment with four-day work weeks ( Reuters ).





THE CLOSER





And finally … Four billion people worldwide use Global Positioning System technology available through satellites. This morning, the U.S. Air Force plans to launch the next generation of GPS satellites aboard a SpaceX Falcon 9 rocket at Kennedy Space Center. Pence, whose portfolio includes space policy, will be on hand for the event, and he’s expected to visit the Pentagon for that purpose this week.

Trump is expected to use the launch as a backdrop for a new presidential order this week creating a Space Command that will help launch the sixth branch of the military, or a space force.

CNN : The Pentagon envisions a space entity under the Air Force. Congress must approve such a military force, and because the House will soon be under Democratic control, that may be a tough legislative sell.

Air Force Times : U.S. Air Force set to launch next-generation in GPS satellites

Florida Today : Weather forecast is fine for this morning’s Cape Canaveral launch.

At least for today, the Air Force wants to upgrade older GPS satellites and make new, high-end features operable by 2022 or later (including a new ground control system). Today’s launch is the first in a series of 32 replacement satellites planned for the Air Force satellites operated out of Colorado Springs, Colo.

The upgraded satellites are expected to provide location information that will be three times more accurate, and for the military, the new technology will be harder for other nations and outside forces to jam.





