COMPROMISE APPEARS OFF THE TABLE: Various congressional Republicans and Democrats have suggested ways to reach a compromise to avoid a partial government shutdown at the end of the month. But the main players, President Trump, Senate Minority Leader Chuck Schumer, D-N.Y., and House Minority Leader/Likely incoming Speaker Nancy Pelosi, D-Calif., appear dug-in and un-budging in their respective positions. Meanwhile, Congress has left town for the holiday break, making a shutdown over border funding increasingly likely.

HAPPENING TODAY: Defense Secretary Mattis will join Secretary of State Mike Pompeo and Canadian Minister of Foreign Affairs Chrystia Freeland and Canadian Minister of National Defence Harjit Sajjan for “policy discussions on priority issues in the bilateral relationship, regional cooperation, and joint security initiatives,” according to the Pentagon.

Afterward, the four will have a joint press availability at the State Department, at approximately 1:10 p.m.

HEDGING ON SPACE FORCE: The big question surrounding President Trump’s vision of Space Force is whether it will end up as his self-described “separate but equal” armed forces branch. That’s the plan the Pentagon is working on under the president’s order, but Congress may still want an option with less overhead and bureaucracy.

Yesterday at breakfast event for reporters Deputy Defense Secretary Patrick Shanahan appeared to be hedging his bets. Shanahan told reporters that he’s narrowed the options down to one, and it’s being turned into a “legislative proposal” for the president to send to Congress. “If I dare to use an aerospace term, I’d say we’re on the final approach,” he said.

But Shanahan says he’s spoken to the new chairman of the House Armed services Committee, Rep. Adam Smith, D-Wash. Shanahan indicated the Pentagon is open to changes Congress might want, which would result in something less than a fully separate military service. “Less is better, and the more detail we can provide on the proposals and people give us a sense of what we need to take out,” Shanahan said. “I’m happy to get the red pen out,” he said. “We need a certain degree of bureaucracy given our size, but the overhead, how do we minimize the cost there? And the staff on the Hill has been very helpful in saying, ‘Make sure you answer these questions on cost.’”

PENTAGON RECOUPS REFUELING MONEY: The Pentagon is seeking to recoup $331 million from Saudi Arabia and the United Arab Emirates for aerial refueling of warplanes in the Yemen war, following an accounting error, Sen. Jack Reed, D-R.I., said. Reed, the Senate Armed Services ranking member, requested an investigation into reimbursements for the American aerial refueling assistance earlier this year and U.S. Central Command reported back that it had not properly tracked the payments.

“This is good news for U.S. taxpayers and underscores the need for strong oversight of the Department of Defense,” Reed said in a statement. “The American people should not be forced to bear these costs and I am encouraged DOD is taking steps to get full reimbursement.” The military provided the refueling to the Saudi-led coalition fighting Iran-backed Houthi rebels until November, when it ended the assistance, amid increasing criticism of the Yemen war on Capitol Hill.

NEW SASC DEMS: Senate Democrats have decided who will fill the three seats on the Armed Services Committee of senators defeated in the midterm elections. Sens. Tammy Duckworth, D-Il., Joe Manchin, D-W.V., and Doug Jones, D-Ala., are set to join the committee next month as junior members, as it starts crafted its annual defense policy bill and debates Pentagon funding levels.

Duckworth, an Iraq war veteran who lost her legs in combat, served on the House Armed Services Committee before being elected to the Senate in 2016. Manchin, a moderate Democrat, served on the Senate Armed Services Committee previously. Jones, who joined the Senate this year, ensures Alabama will regain representation for its aerospace industry in Huntsville and shipbuilding industry in Mobile after recent departures of Republican Sens. Jeff Sessions and Luther Strange.

INHOFE DITCHES DEFENSE STOCKS: Sen. Jim Inhofe, R-Okla., the Senate Armed Services chairman, said he is abandoning defense stocks, amid criticism over his financial adviser attempting $55,000-$100,000 in trades of Raytheon shares on Monday — after the senator brokered a potentially massive defense budget hike with Trump.

“I had no say in any of the investments that took place by this group because I’m one of 900 and some clients that all invest in the same thing,” Inhofe told CNN. “Now, so that it wouldn’t look bad, I’ve said, ‘When you come to our account, you can take out anything it might look like an aerospace or a defense contractor,’ and that’s what they did.”

EXPECTING MORE FROM AFRICA: The Trump administration is pushing African nations to take on a greater role fighting the terrorist groups that threaten them, White House national security adviser John Bolton said Thursday, as he unveiled a new strategy for the continent. The Pentagon announced last month it will draw down the roughly 7,200 U.S. military personnel in Africa by 10 percent over the next several years.

“What we’d like to do is empower the African countries to do more of their own security, to do it in coordination with one another. They’re the ones who know the neighborhood rather than have the deployment of American forces who are comparatively very well paid and well equipped,” Bolton said during an address at the Heritage Foundation.

NEW STRATEGY: Trump’s newly-unveiled Africa strategy focuses on countering growing Chinese and Russian influence and takes a hardline approach to years of what Bolton described as failed U.S. aid and United Nations peacekeeping support.

“Unfortunately, billions upon billions of U.S. taxpayer dollars have not achieved the desired effects. They have not stopped the scourge of terrorism, radicalism, and violence. They have not prevented other powers, such as China and Russia, from taking advantage of African states to increase their own power and influence. From now on, the United States will not tolerate this long-standing pattern of aid without effect, assistance without accountability, and relief without reform,” Bolton said.

NON-COMBAT DEATH IN AFGHANISTAN: NATO-led Operation Resolute Support reports that U.S. service member has died in “a non-combat related incident” in Afghanistan. The incident, which occurred yesterday, is under investigation.

This is the 14th U.S. death in Afghanistan this year, and the second in a “non-combat” situation.

PUTIN’S UKRAINE STRATEGY: A top Senate Republican is accusing Russian President Vladimir Putin of trying to seize key Ukrainian cities that would give him a “land bridge” to the annexed peninsula of Crimea. “That strategy is very clear,” Wisconsin Sen. Ron Johnson, who chairs the Foreign Relations subcommittee for Europe, told the Washington Examiner. “It’s pretty obvious what Putin’s doing.”

KELLY’S REPLACEMENT: Dismissing reports he’s having trouble finding a suitable replacement for White House Chief Staff John Kelly, President Trump said yesterday he has narrowed his list of candidates down to five. “Five people. Really good ones. Terrific people. Mostly well-known, but terrific people,” Trump told reporters at the White House before a meeting with incoming governors.

In an interview with Fox News, Trump indicated he was showing the retired Marine general the door because he wants some who is more like-minded. “I want somebody that’s strong, but I want somebody that thinks like I do. It’s my vision — it is my vision, after all,” Trump said. “At the same time, I’m open to ideas.”

Kelly’s departure leaves Jim Mattis as the last general standing from Trump’s original team, which was glistening with former four-stars.

MCSALLY’S FUTURE MORE UNCERTAIN: Arizona Republican Rep. Martha McSally, who narrowly lost her bid to move up to the Senate, also may not get to fill the unexpired seat of the late Sen. John McCain. According to a published report, Gov. Doug Ducey has soured on the former A-10 squadron commander, who got criticized by some in her own party for not accepting blame in her November loss to Democratic Rep. Kyrsten Sinema.

The Washington Post says one reason for antipathy is a post-election memo, which reportedly “sparked outrage inside Ducey’s circle and among broader swaths of influential Republicans, who felt her team did not own up to its strategic mistakes.” The memo attributed her defeat in November largely to external factors, including strong Democratic fundraising, a geographic disadvantage and voter hostility toward President Trump, the Post reported.

THE RUNDOWN

Washington Post: Former Special Forces soldier, once lauded as a hero, faces murder charge

Roll Call: Senate Flexes Congress’ War Powers Authority, For First Time Ever

Defense News: Will the Space Force sit under the Department of the Air Force? The Pentagon finally has an answer.

Task and Purpose: Army Charges Green Beret With Murder For Killing Suspected Taliban Bomb-Maker In 2010

AP: Pentagon: NKorea slow to negotiate over US war remains

Breaking Defense: As Pentagon Demands Cybersecurity, Industry Group Offers New Standards: AIA

Military.com: Navy Achieves New F-35 Fighter Jet Milestone on USS Carl Vinson

Reuters: Bomb threats demanding bitcoin emailed across U.S. and Canada, none found credible

Washington Post: Bolton says ‘predatory’ China is outpacing the U.S. in Africa

New York Times: Warring Sides in Yemen Agree to Truce in Key Port City

USNI News: $3.6 Billion Needed To Rebuild Camp Lejeune Facilities Damaged By Hurricane Florence