Update 8: After a day of frenzied negotiations, the House managed to pass the stopgap funding bill thanks to the cooperation of the Freedom Caucus, which threw their support behind the legislation at the last minute...

The vote was 230-197...

#BREAKING: HOUSE PASSES STOPGAP BUDGET CR ON PARTY-LINE VOTE, 230-197.



It now heads to the Senate — 60 votes needed to avert a #GOPshutdown at 11:59 PM EST tomorrow.



Many Democrats and some Republicans are vowing to oppose the bill, as Trump and the GOP hold DREAMers hostage. — Cyrus Toulabi (@CyrusToulabi) January 19, 2018

The Senate, meanwhile, could begin procedural votes as soon as tonight...

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Update 7: With Trump demanding that the House "must pass the spending bill tonight", Bloomberg reports that Meadows says he and the majority of his caucus have changed their minds and will now vote with the rest of their party, likely giving the one-month spending extension the juice it needs to clear the lower chamber.

However, the measure must still pass the Senate before landing on the president's desk, and as we pointed out below, the likelihood of this happening before the present continuing resolution expires on Saturday.

To be sure, Meadows has already flip-flopped several times this week. With the vote set to take place in 20 minutes, it's important to remember that, during the Trump era, nothing is done until it is done...

As a reminder, Republicans need 218 votes to pass the bill.

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Update 6: As debate on the continuing resolution begins, RollCall reported that Freedom Caucus leader Mark Meadows says he's still opposed to the bill. Furthermore, he implied that President Donald Trump is backing his move against the leadership...

Meadows, emerging from a @freedomcaucus meeting during which he spoke with President Donald Trump by phone, said he's still opposed to the CR and suggested Trump is backing whatever he's plotting.



"There's no distance between our positions," he said. — Lindsey McPherson (@lindsemcpherson) January 18, 2018

Assuming this isn't bluster, this would represent a remarkable deterioration in Trump's relationship with Speaker Paul Ryan and Senate Majority Leader Mitch McConnell...

Watch the debate live below:

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Update 5: Voting on the resolution to reauthorize section 702 of the FISA Act has begun - and if you thought that meant the conflicting headlines about the whip count would stop - well, you were wrong.

A majority voted to advance the bill for debate - which could be construed as a good sign of its chances on the House floor. But while Republican leaders are insisting they have the votes to pass it, Democrats say they have the votes to block it, according to Politico.

Headlines about Democrats having enough votes to block the bill sent stocks lower and Treasury yields higher as investors braced for a weekend shutdown...

The 10-year Treasury yield climbed to its high of the session, also its highest level since December 2016.

Meanwhile, Senate Democrats say they have the votes to block passage of the stopgap with their caucus united in nearly unanimous opposition.

As Politico writes...

...Senate Majority Leader Mitch McConnell (R-Ky.) appears to have a serious problem. Senate Democrats said they're confident they have the votes to block the stop-gap spending bill that the House is taking up, according to two Democratic senators and a senior party aide. And top Senate Republicans are openly worried about the situation as they struggle to keep their own members in the fold. “I’m concerned that we, yeah, we may not have 60 votes in the Senate,” South Dakota Sen. John Thune, the third-ranking Senate Republican, said Thursday morning. “And I think that’s obviously problematic.” After a lively party lunch on Thursday, the vast majority of the Senate Democratic caucus emerged in opposition to the GOP proposal. “I am convinced that between Republicans who publicly said they’re [voting] no and Democrats who said they’re a ‘no,’ there are not enough votes in this chamber” to pass the House plan, said a Democratic Senator, who requested anonymity to discuss the matter freely. The sentiment was confirmed by a Democratic aide and another senator.

In summary: Things don't look good. At this point, it'd be prudent to expect the federal government to shut down at midnight, Friday.

For what it's worth, McConnell told his members in an email obtained by Politico that he intends to keep the chamber in session through the weekend if a shutdown occurs. As we noted below, Republican senators are also discussing the possibility of a much shorter spending bill...

With several hours left before the final vote in the House, here's a summary of what Politico is calling "Paul Ryan's biggest problem..."

Ryan’s biggest problem, unsurprisingly, is the House Freedom Caucus, which is threatening to vote no unless they get a concession from leadership. Freedom Caucus leaders Mark Meadows (R-N.C.) and Jim Jorden (R-Ohio) told reporters Thursday that they had yet to strike a deal with Ryan’s team to deliver their votes. “What we want to do is do what’s right by the military, so we offered a couple different things,” he said. “We said, ‘Look, if you can’t [agree to] the full year [of defense spending]— which is where the conference is — you can do something smaller than that but something that is going to break this pattern.” Conservatives, who sources say are eager to back the bill but need a small win to save face, have floated another request: A vote on a conservative immigration bill authored by House Judiciary Chairman Bob Goodlatte. Leaders worry the legislation could upend bipartisan talks to shield Dreamers from deportation, but rank-and-file members say that's not reason enough to withhold a vote. House Republicans are hopeful they can also pick up a few Democratic votes, which is why they opted to keep the six-year CHIP funding despite Trump’s tweet. But Democrats seem to have only become more emboldened after Trump’s recent comments about immigrants from Africa, El Salvador and Haiti coming from "shithole countries." Those remarks have hardened Democrats' position against backing any funding bill without a deal on DACA. Despite Ryan’s efforts to entice Democrats with provisions to fund a popular children’s health insurance bill, House Minority Leader Nancy Pelosi’s (D-Calif.) caucus appears unified in opposition, forcing Republicans to rely on their own members.

Basically, conservative Republicans' decision to hold out for stringent immigration concessions. They also want to "do what's right by the military" - which means they want appropriations for defense spending to be separated out from the rest of the spending bill and locked in until the end of the fiscal year.

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Meanwhile, Meadows appears to be keenly aware of his bargaining position - at least, that's what one might infer from some of his recent comments to the press, like this quip made to the Wall Street Journal...

House Speaker Paul Ryan (R., Wis.) projected confidence Thursday morning that the House would be able to pass the stopgap bill, but he didn’t explicitly say he had sufficient GOP support. The bill needs 216 votes to pass, assuming all lawmakers are present and voting. There are 238 Republicans and 193 Democrats in the House. “We’re making really good progress with our members,” he said, predicting they would back the bill when the only alternative was a shutdown. Mr. Meadows said he wouldn’t buckle under pressure from GOP leaders. “I don’t get squeezed. I squeeze others,” he said.

...Indeed

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Update 4: Freedom Caucus leader Mark Meadows says at least 25 members will vote against the stopgap bill. Meadows had hinted at this in an interview yesterday...

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Update 3: The headlines emanating from the debate over the stopgap spending bill are growing increasingly nonsensical...

Two House Democrats Say GOP Has Votes for Stopgap Spending Bill



Meanwhile house republicans says GOP does not — zerohedge (@zerohedge) January 18, 2018

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Update 2: Moments after House Democratic leader Nancy Pelosi reiterated that Democrats intend to unanimously oppose the Republican stopgap bill, Sen. Jeff Flake revealed that a group of senators are considering a five-day stopgap bill that would buy Republicans another week to avert a shutdown, according to Reuters. Thanks to the absence of John McCain and the opposition of Lindsey Graham, Republicans will need 11 Democratic votes to pass the stopgap through the Senate. As of now, not one Senate Democrat has publicly endorsed the plan.

Meanwhile, Graham is working with fellow Republicans to include promises in a temporary spending bill that lawmakers will work on immigration and military funding in the future, which could remove two obstacles in congressional negotiations on averting a government shutdown, CNN reported on Thursday.

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Update: After President Trump earlier criticized the stopgap spending bill, saying provisions to extend CHIP should only be included in a long-term plan, a White House aide told Bloomberg that the president does, in fact, support the stopgap spending measure which is coming for a vote in the House tonight.

The clarification follows a warning from Senate Democratic leader Chuck Schumer, who warned that the chances of the House plan clearing in the senate “don’t look good.” Specifically, Schumer cited a lack of funding for the opioid crisis as one reason it likely won’t pass – but of course the biggest obstacle is the impasse on a plan to enshrine the DACA protections for 690,000 undocumented immigrants who were brought to the US as minors into law.

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News of Trump's support helped mitigate a drop in the dollar and US stocks, which are becoming increasingly sensitive to the notion that there's a strong chance of a shut down this weekend.

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While it has been clear that the government shutdown deadline is looming, stocks haven't cared.. until now. Politco reports that Senate majority leader Mitch McConnell is making contingency plans for the growing possibility of a government shutdown.

USDJPY, and therefore stocks, tumbled on the headlines...

As Politico details, the Senate majority leader intends to keep the chamber in session through the weekend and stage a series of votes designed to put Democrats from conservative states on defense, according to two Republican sources familiar with his plans and an email sent by McConnell on Thursday and obtained by POLITICO.

The goal would be to place the blame for a shutdown squarely on 10 Democratic senators up for reelection this fall in states won by Donald Trump in 2016, and make them the face of a government closure. The strategy is risky for Republicans, considering that they control the White House and Congress Washington. Should funding lapse at midnight Friday, McConnell would keep the Senate in session and try to force Democrats to repeatedly vote against funding for children’s health care money and government spending.

This comes after President Trump warned that a shutdown is likely.

In brief remarks made during a visit to the Pentagon, Trump told reporters it’s possible that a government shutdown "could happen, we’ll see what happens," adding it’s "up to the Democrats."

Trump added that the military would "lose big" in a partial govt shutdown, "and we’re never letting our military lose at any point"