COUNTDOWN TO SHUTDOWN: Four days from now, at midnight Friday, the federal government's authority to spend money expires. Hopes for an immigration deal that would pave the way for a real budget have faded again as a chill settles over Washington, and the finger-pointing and blame games are on full display. Democrats are threatening to withhold the votes that would allow another temporary spending extension, insisting any continuing resolution must restore the protections under the Delayed Action for Childhood Arrivals program that was canceled by President Trump.

HOLE VS. HOUSE: The president continues to feud with Democratic Sen. Dick Dubin, who he has now assigned a mocking nickname, “Dicky Durbin,” which as Trump taunts go is fairly mild. “Senator Dicky Durbin totally misrepresented what was said at the DACA meeting. Deals can't get made when there is no trust! Durbin blew DACA and is hurting our Military.” Several reports say the reason Sens. Tom Cotton and David Perdue, and Homeland Security Secretary Kirstjen Nielsen have not confirmed the report that Trump referred to “shithole” countries is that Trump actually said “shithouse.” Notably when asked about the “shithole” comment on Fox News Sunday, Nielsen said she did not recall the president “saying that exact phrase.”

DURBIN STUNNED: “I stick with my original interpretation. I am stunned this is their defense,” Durbin said yesterday. “I know what happened. I stand behind every word that I said. I don’t know that changing the world from ‘hole’ to ‘house’ changes the impact that this has.”

COTTON AND PERDUE KILLED THE DEAL: Trump was initially supportive of the bipartisan compromise fashioned by Durbin and Republican Lindsey Graham and invited them to the White House to lay out the details, according to an account that the Washington Post says is based on interviews with more than a dozen White House officials, Capitol Hill aides and lawmakers. “But when they arrived at the Oval Office, the two senators were surprised to find that Trump was far from ready to finalize the agreement,” the Post reports. “He was ‘fired up’ and surrounded by hard-line conservatives such as Sen. Tom Cotton (R-Ark.), who seemed confident that the president was now aligned with them.”

‘CLOSE THE DEAL’: “Mr. President, close the deal,” Graham pleaded yesterday while talking to reporters in his home state of South Carolina. “Eighty percent of Americans want to give the DACA kids a better life and 80 percent of Americans want to secure our border and change the broken immigration system,” said Graham, sidestepping the question of what language the president used in the now-infamous meeting. “It’s gonna take you, Mr. President, working with Republicans and Democrats to get this done. It’s not gonna be done on Twitter, by tweeting. It’s gonna be done by talking and understanding.

WHAT’S NEXT? THREE OPTIONS: Here are the possible outcomes this week:

Budget compromise: One solution would be a compromise on immigration — and equally as important — a bipartisan agreement to lift the congressionally imposed budget caps that stand in the way of passing a budget that fully funds the money authorized, but not yet appropriated, for the Pentagon. “We are making good progress on cap negotiations. We're working with our counterparts on getting a cap agreement,” House Speaker Paul Ryan told reporters yesterday. “We have to have a cap agreement in order to fund the military, in order to have — give the appropriators the number they need to write their bill.” But Ryan said there simply is not enough time to get that done by the looming Friday deadline. “The appropriators will need time to be able to write an actual omnibus appropriations package once a cap agreement is met,” Ryan said, adding lawmakers have to “give the appropriators the number they need to write their bill.”

Continuing resolution: So that points to another month-long continuing resolution, which would normally be a prudent source of action to prevent a damaging government shutdown. If approved, it would the fourth for this cycle. Except this time Democrats, emboldened by their power in the Senate and angered by the president’s comments, are threatening to block another short-term CR. “A majority of my caucus, myself included, we will not fund the government without a DACA deal,” said Democratic Sen. Chris Coons yesterday on CNN.

The current stalemate is “a crisis of the president's own creating,” Coons said. “The deadline that we're working up against for finding some resolution to the Dreamers, to the DACA situation, is an artificial one created by the president.”

Government shutdown: So that makes a prospect of a partial shutdown more real unless someone caves, or the Republicans can muster 213 votes in the House, and convince at least nine Democrats in the Senate to break ranks. Some Republicans in the House are tired of voting for short-term funding measures that limit the Pentagon from spending money on new initiatives designed to restore declining readiness. Still, most lawmakers on Capitol Hill, both Republicans and Democrats, do not want a shutdown. So another continuing resolution remains the most likely outcome on Friday.

WHO’S HURT? The president's claim that a shutdown will “badly hurt” the U.S. military is one the Pentagon endorses. “I cannot emphasize too much how destructive a shutdown is,” Defense Department Comptroller David Norquist said last month. A shutdown could grind maintenance on major weapons systems to a halt and bar contractors from showing up to work. Norquist said at a Pentagon briefing before the last shutdown threat that death benefits for troops killed in the line of duty would also be held up. “The disruption of this ripples through the organization and is very destructive,” Norquist said.

Active-duty troops would be required to show up for duty, but they would not get paid until a budget or special legislation is passed. Pentagon civilians could face unpaid furloughs.

Good Tuesday morning and welcome to Jamie McIntyre’s Daily on Defense, compiled by Washington Examiner National Security Senior Writer Jamie McIntyre (@jamiejmcintyre), National Security Writer Travis J. Tritten (@travis_tritten) and Senior Editor David Brown (@dave_brown24). Email us here for tips, suggestions, calendar items and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email and we’ll add you to our list. And be sure to follow us on Twitter @dailyondefense.



HAPPENING TODAY — THORNBERRY BREAKFAST: The chairman of the House Armed Services Committee sits down with a table full of defense reporters for an 8 a.m. breakfast at Washington’s Fairmont Hotel. The Defense Writers Group event with Rep. Mac Thornberry comes as Congress is staring down a Friday deadline to pass a budget for the military and rest of the federal government. Thornberry has been one of the loudest and most powerful voices on Capitol Hill calling for a major hike in defense spending and an end to stopgap continuing resolutions. He is likely to be peppered with questions on how the budget wrangling might shake out for the Pentagon, as well as his priorities for the 2019 National Defense Authorization Act as Armed Services starts work writing the mammoth policy bill.

TILLERSON IN VANCOUVER: Rex Tillerson is in Vancouver for a 20-nation gathering that is hosted jointly by the U.S. secretary of state and his Canadian counterpart Chrystia Freeland to discuss ways to maximize what Tillerson has called “peaceful pressure” on North Korea to give up its nuclear weapons and ballistic missile programs. “The meeting will bring together nations from across the globe to demonstrate international solidarity against North Korea’s dangerous and illegal nuclear and ballistic missile programs,” said a State Department release. “Discussions will focus on advancing and strengthening diplomatic efforts toward a secure, prosperous and denuclearized Korean Peninsula.” Tillerson’s official schedule for today is here.

Defense Secretary Jim Mattis attended last night’s ministerial welcome dinner, before departing Canada today for Mountain Home Air Force Base in Idaho to visit the 366th Fighter Wing, known as the "Gunfighters."

“The meeting is being attended by foreign ministers and senior diplomats of nations that sent troops or humanitarian aid to the U.N. Command that supported South Korea in the fight against the communist North and its allies during the 1950-53 Korean War,” the AP reports.

BUTTON TALK: North Korea’s official media has reacted to Trump’s tweet that he has a bigger nuclear button than Kim Jong Un, calling his words the “spasm of a lunatic,” the AP is reporting this morning.

“The spasm of Trump in the new year reflects the desperate mental state of a loser who failed to check the vigorous advance of the army and people of the DPRK,” the Rodong Sinmun commentary said. “He is making [a] bluff only to be diagnosed as a psychopath.”

INDUSTRY COULD SEE ‘TRUMP TAILWIND’: The defense industry was feeling a little let down in May when Trump finally released his first budget request and it did not meet the hype. But its outlook has brightened over the past eight months, as defense stocks surged and Congress began considering a defense spending hike. “Normally, I would say ‘cautiously optimistic.’ I think we are going to drop the ‘cautiously’ on this one. We are optimistic,” said Dan Stohr, spokesman for the Aerospace Industries Association, which represents more than 300 aerospace companies. “There are a lot of things that are breaking the right way, if they are sustained.” And Trump’s lower-than-expected budget request? It still appears likely to yield a significant boost for the industry this year.

Even as uncertainty grows over the 2018 defense budget, the defense industry’s strong showing on Wall Street could soon merge with a “tailwind” from a spending hike to lift it higher, said James McAleese, of the McAleese and Associates government contracts consulting firm. “In a perfect world, the department would get the full 10 percent increase in 2018, which would be a $50 billion increase from $524 billion [last year] to $574 billion in the base, and potentially some additional upside congressional plus-ups perhaps up to an additional $15 billion on top of that,” McAleese said. A $50 billion hike would be a boon. If passed, the so-called “tailwind” infusion would begin later this year as the Pentagon hustles to spend an estimated $192 billion in operations and maintenance money, he said.

REMEMBER THE WAR? The battle against the Islamic State is still underway in Iraq and Syria. Pentagon reporters will be briefed this morning by Marine Brig. Gen. James Glynn, deputy commanding general of the anti-ISIS coalition, on where things stand. The briefing will be live-streamed from the theater on www.defense.gov/live.

Yesterday a pair of suicide bombers blew themselves up in Baghdad, killing 27 people, and providing a grim reminder that the battle against ISIS may be ending, but it’s not over.

U.S.-TURKEY RELATIONS ON THE SKIDS: Turkish President Recep Tayyip Erdogan is calling on NATO to defend it against — wait for it — the United States! Erdogan is livid over a U.S. proposal to form a 30,000-strong Kurdish-led border security force in Syria. Yesterday Erdogan accused the U.S. of creating an “army of terror,” according to the AP, which reports Turkey is threatening to launch a military offensive to crush the border force.

Erdogan was quoted by the AP as saying, “Hey NATO! You are obliged to make a stance against those who harass and violate the borders of your members,” in an address to his parties deputies.

COUNTING BOMBERS: Meet Capitol Hill staffer Chrissi Lee in this week’s Washington Examiner magazine profile. Lee is the military legislative assistant for Rep. Vicky Hartzler, a subcommittee chairwoman on the House Armed Services Committee, and she has a deep interest in the military’s long-range bomber presence. Her finish time in the Marathon Corps Marathon was also not too shabby.

WHEN THE POPE’S WORRIED… Pope Francis warned yesterday that the world is on the verge of a nuclear war. "I think we are at the very limit," he said when asked by a reporter aboard his plane about the chances of a nuclear conflict. "I am really afraid of this. One accident is enough to precipitate things."

Reporters were given a photograph of the devastation following the 1945 bombing of Nagasaki, Japan, which showed a Japanese boy carrying his deceased brother. "I was moved when I saw this. The only thing I could think of adding were the words ‘the fruit of war,’ " the Pontiff said. "I wanted to have it reprinted and distributed because an image like this can be more moving than a thousand words. That is why I wanted to share it with you."

THE RUNDOWN

Daily Beast: A Modest Proposal for Striking North Korea

New York Times: Suicide Bombings in Baghdad Puncture Newfound Hope

Washington Post: UAE accuses Qatar of intercepting 2 civilian flights, escalating Persian Gulf feud

Wall Street Journal: Drone Attacks on Russian Bases in Syria Expose Security Holes

AP: Missile-alert error reveals uncertainty about how to react

Defense News: Dunford on the US-Pakistan relations: ‘I’m not giving up’

Reuters: North Korea meeting to stress importance of sanctions: Canada

The Cipher Brief: North Korea ‘Bloody Nose’ Could Turn into Torrent

Forbes: Doubts About SpaceX Reliability Persist As Astronaut Missions Approach

USA Today: Russian Foreign Minister: U.S. behavior is destabilizing the world

War on the Rocks: An Unconventional Proposal for Bringing the OA-X to Life

Defense One: Nuclear Command Network Would See Comprehensive Upgrade Under Trump Plan

Task and Purpose: Pics Or It Didn’t Happen: Warfighting In The Age Of Videotaped Atrocities

Reuters: Transgender U.S. Military Recruits Enlist Amid Uncertainty

Calendar

TUESDAY | JAN. 16

10 a.m. 1775 Massachusetts Ave. NW. Pakistan, America, and extremism: The path ahead. Brookings.edu

11 a.m. Pentagon. Marine Brig. Gen. James Glynn, deputy commanding general of Special Operations Joint Task Force - Operation Inherent Resolve briefs the media by video to give an update on counter-ISIS operations. Live-streamed on www.defense.gov/live

12 p.m. 1800 M St. NW. National Security in the Age of Blockchain. defenddemocracy.org

12:15 p.m. 740 15th St. NW. The Future of Euro-Atlantic Conditionality. newamerica.org

12:30 p.m. 1201 Pennsylvania Ave. NW. Iran Protests: Consequences for the Region and Opportunities for the Trump Administration. hudson.org

3 p.m. 1300 Pennsylvania Ave. NW. Raised Stakes: U.S. Policy Toward Iran in 2018. wilsoncenter.org

3 p.m. 1211 Connecticut Ave. Emergency Management in Japan: Prospects for US-Japan Cooperation. stimson.org

5:30 p.m. 1616 Rhode Island Ave. NW. The View of the U.S. from Abroad: A Conversation with International Ambassadors. csis.org

WEDNESDAY | JAN. 17

6:30 a.m. AUSA Institute of Land Warfare breakfast with Gen. Mark Milley, Army chief of staff. ausa.org

6:45 a.m. 1800 Jefferson Davis Hwy. Special Topic Breakfast with Gloria Valdez, deputy assistant secretary of the Navy for ship programs. navyleague.org

8:30 a.m. 1789 Massachusetts Ave. NW. Congress and the 2018 national security landscape: A conversation with Sen. Lindsey Graham. aei.org

9:30 a.m. Press Briefing: Previewing the Upcoming National Defense Strategy. csis.org

9:30 a.m. 1211 Connecticut Ave. NW. Getting Ahead of the Threat Curve: Duty of Care and Organizational Accountability for Nuclear Security with Michael Chertoff, former Homeland Security secretary. stimson.org

10 a.m. Rayburn 2154. Battlefield successes and challenges with recent efforts to win the war against ISIS. oversight.house.gov

11:30 a.m. Hart 216. Open Hearing on the Nomination of Michael Atkinson to be Inspector General of the Intelligence Community and Jason Klitenic to be General Counsel of the Office of the Director of National Intelligence. intelligence.senate.gov

12 p.m. 214 Massachusetts Ave. NE. Bully of Asia: Why China’s Dream Is the New Threat to World Order. heritage.org

2 p.m. Rayburn 2172. Joint Subcommittee Hearing. More Than a Nuclear Threat: North Korea’s Chemical, Biological, and Conventional Weapons. foreignaffairs.house.gov

2 p.m. 1030 15th St. NW. NATO's maritime frontier and a view from its maritime command with Vice Adm. Clive Johnstone, Royal Navy commander Allied Maritime Command. atlanticcouncil.org

THURSDAY | JAN. 18

7:30 a.m. 300 First St. SE. AFA Breakfast Series with Matt Donovan, undersecretary of the Air Force. michelleaerospacepower.org

8 a.m. 2121 Crystal Dr. Electronics Division Meeting. ndia.org

8:45 a.m. 1616 Rhode Island Ave. NW. Defending Defense: A Conversation with House Speaker Paul Ryan on Military Readiness. csis.org

10 a.m. 1225 I St. NW. Citizen Soldiers or Warrior Caste: Who Will Serve in America’s Future Military? A discussion with Air Force Secretary Heather Wilson; Amber Smith, deputy assistant to the secretary of defense for outreach; and others. bipartisanpolicy.org

11 a.m. 214 Massachusetts Ave NE. Crashback: The Power Clash Between the U.S. and China in the Pacific. heritage.org

12 p.m. 444 North Capitol St. Press briefing and launch of the National Commission on Military, National and Public Service.

12 p.m. 1800 M St. NW. Atilla, Zarrab, and U.S.-Turkish Relations. defenddemocracy.org

12:30 p.m. 2101 Constitution Ave. NW. Air Force Science and Technology Engagement Summit with Air Force Secretary Heather Wilson. nationalacademies.org

3:30 p.m. Rayburn 2118. Surface warfare at a crossroads with Navy Secretary Richard Spencer and Adm. John Richardson, chief of naval operations. armedservices.house.gov

5 p.m. 214 Massachusetts Ave NE. The Importance of the U.S. Nuclear Deterrent. heritage.org

FRIDAY | JAN. 19

9 a.m. 1030 15th St. NW. Iran Looks East conference. atlanticcouncil.org

12:15 p.m. 740 15th St. NW. The Syrian Opposition in 2018 with Osama Abu Zayd, spokesman for the Free Syrian Army, and moderator Peter Bergen, director of the International Security Program at New America. newamerica.org

MONDAY | JAN. 22

10 a.m. 1616 Rhode Island Ave. NW. Charting a New Course for the Defense Industrial Base. csis.org

4:30 p.m. 1201 Pennsylvania Ave. NW. Book discussion of “1917: Lenin, Wilson, and the Birth of the New World Disorder” with author Arthur Herman. hudson.org

TUESDAY | JAN. 23

11 a.m. Livestream only: Intelligence beyond 2018: A conversation with CIA Director Mike Pompeo. aei.org

12 p.m. 1201 Pennsylvania Ave. NW. Turkey, the Kurds, and the Struggle for Order in the Middle East. hudson.org

12:30 p.m. 1777 F St. NW. Foreign Affairs Issue Launch with Former Vice President Joe Biden. cfr.org