Republicans Reject Shutdown Offer as Travel, Food Aid Delays Hit

(Bloomberg) — Senate Republicans on Friday rejected Democrats’ offer to scale back their shutdown demands to a one-year extension of expiring health care subsidies, prolonging a stalemate that has disrupted air travel and delayed food aid.

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The Affordable Care Act subsidies have been at the center of the debate during the 38-day shutdown, the longest in US history.

Senate Democratic leader Chuck Schumer billed his offer as a “simple compromise” that could pass the chamber “within a few hours.”

Republican leader John Thune dismissed the offer as a “nonstarter” but told reporters at the Capitol that it indicated “progress.”

“They’re feeling the heat,” Thune said.

President Donald Trump urged the Senate to stay in town until there’s a deal ending the shutdown. Trump plans to leave for his Mar-a-Lago retreat in Florida later in the day but will be back in Washington on Sunday to attend an NFL game.

A White House official speaking on the condition of anonymity said the Trump administration interpreted Schumer’s offer as a sign Democrats are under pressure to make a deal. The official reiterated their position that Republicans would meet with Democrats on health-care tax credits once the government is open.

Stock buyers stepped in on hopes the shutdown is nearing an end with the benchmark S&P 500 ending up for the day, reversing a drop that earlier reached 1.3%. The fact that the parties were trading offers at all was seen as a positive step for investors.

Shares of the largest US airlines pared earlier gains after touching session highs on Schumer’s comments. American Airlines Group Inc.’s stock rose 3.8%. Delta Air Lines Inc. gained 1.9% while Southwest Airlines Co. rose 3% and United Airlines Holdings Inc. was up 1.8%.

Airlines across the US have canceled flights scheduled for the coming days. The US Transportation Department and FAA earlier this week ordered airlines to cut flights at 40 major airports, starting with a 4% reduction on Friday and increasing to a 10% target by the end of next week.

Flight reductions in the US could escalate to as much as 20% if the ongoing government shutdown leads to worsening air traffic control staffing, Transportation Secretary Sean Duffy said on Fox News.

Food assistance has been paused for 42 million Americans. While a federal court judge on Thursday ordered the Trump administration to release funds for food aid, the White House is appealing the decision.

Democrats originally demanded $1.5 trillion in spending be attached including a $350 billion permanent extension of the ACA tax credits and a repeal of Medicaid work requirements passed by Republicans this year.

The Senate later Friday is set to hold a procedural vote on a bill that would pay federal workers who have gone without pay during the shutdown.

Thune has threatened to hold votes over the weekend on a stopgap bill in order to keep lawmakers in Washington to work on a shutdown deal.

Thune has said he will promise to hold a vote on ACA tax credits this year but can’t promise they will pass. House Speaker Mike Johnson has refused to promise a vote.

–With assistance from Yash Roy, Josh Wingrove and Lillianna Byington.

(Updates with Trump comment)

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