Watch Live:
Holiday Yule Log
Is Shutdown The New Normal?
PHOTO: Harry Reid and Nancy Pelosi

Pablo Martinez Monsivais/AP Photo

By MICHAEL FALCONE ( @michaelpfalcone )

NOTABLES

  • NO END IN SIGHT: President Obama and leaders of both houses of Congress left a 90-minute meeting at the White House last night no more closer to ending a government shutdown then when the started, ABC's ABBY PHILLIP notes. "They will not negotiate," House Speaker John Boehner told reporters after leaving the West Wing. "We had a nice conversation, a light conversation, but at some point we've got to allow the process the Congress gave us to work out." Boehner insists that Democrats in the Senate send negotiators to a conference with House Republicans to work out the differences between the two sides on the budget. But Democratic leaders Rep. Nancy Pelosi, D-Calif., and Sen. Harry Reid, D-Nev., said the president reiterated that they would hold firm in their position. "This has never happened before, for a political party to be will willing to take the country to the brink of financial disaster," said Reid, the Senate majority leader. "We're through playing these little games." http://abcn.ws/18uSkcW
  • WAIT, IT GETS WORSE: Speaking to reporters outside the White House last night, Pelosi, the House minority leader, warned that the combination of the government shutdown and the threat of a default if Congress fails to raise the debt ceiling by Oct. 17 would be "cataclysmic." Boehner ignored a question about whether the government will default.
  • 'NEITHER SIDE GETS EVERYTHING': The White House session last night was important, but perhaps an even more critical meeting for Speaker John Boehner took place earlier on Wednesday in his Capitol office. There, met with a group of more than a dozen moderate Republicans, urging them to stick with him in what he acknowledged was an anxious and tense period during the government shutdown, ABC's JEFF ZELENY reports. "Trust me," was the message relayed from Boehner, one lawmaker told ABC News. A new grand bargain - or the attempt at one - could be in the works. Or that's one plan in Boehner's strategy. The speaker and other House Republicans increasingly believe a on the budget impasse should be joined with talks on raising the debt ceiling. It would give his side more leverage in the negotiations. House Majority Leader Eric Cantor hinted that some kind of compromise would ultimately happen: "Americans believe, as do we, neither side gets everything," he told ABC News yesterday. http://abcn.ws/1fKc2rF
  • 'EXASPERATED': Yesterday President Obama, in an interview with CNBC, said he was "exasperated" by a continued standoff, and warned that financial executives would be wise to be concerned that Congress might fail to raise the debt ceiling. "When you have a situation in which a faction is willing to potentially default on U.S. government obligations, then we are in trouble," he said. "And if they're willing to do it now, they'll be willing to do it later."

THE ROUNDTABLE

ABC's JEFF ZELENY: The sense of dire urgency surrounding a government shutdown is slowly giving way to a new normal in Washington, with all sides nearly as dug in as they were days ago. Yes, Republicans are taking on a bit of political water, but so far they are nowhere near sinking. So what's the end game? It still likely rests with GOP members of Congress feeling so much pressure from back home that they can no longer support the hard-line. But so far, that group of Republicans only sits at 18 or so. And Rep. Tom Cole, a close ally of Speaker Boehner's, put that number in perspective yesterday when he told me: "Even if you want a clean CR, it doesn't mean that you would undermine our team to get it."

ABC's RICK KLEIN: "The president reiterated one more time tonight that he will not negotiate," House Speaker John Boehner said upon emerging from the White House last night. And so Boehner has a choice, one that hasn't changed that much since the government began - or before it began, for that matter. He can believe the president when he says he's chosen this moment to hold steadfast, or his conservative colleagues who believe they remain on a path to something - anything - productive. OK, we know the choice isn't entirely Boehner's, and a small band of moderates is trying to make that choice no choice at all. If Boehner and President Obama had a functioning, human relationship, one might imagine Boehner back-channeling or even directly telling the president what he needs to give him the cover necessary to end a pointless standoff with real and growing implications. Of course, they don't have that relationship, and this is not the ideal time to get it. So everyone basically knows how it will end. Hint: It won't be through negotiations.

ABC's MICHAEL FALCONE: In case it wasn't already apparent, the World War II Memorial in Washington, DC is fast becoming the most recognizable symbol of the government shutdown with the Republican Party offering to pay to keep it open and Democrats lodging charges of political grandstanding. Yesterday - the second full day of the shutdown - Republican National Committee Chairman Reince Priebus descended on the massive granite memorial at the foot of the Reflecting Pool on the National Mall vowing to use party funds to keep it open to the public for a month. "The Obama administration has decided they want to make the government shutdown as painful as possible, even taking the unnecessary step of keeping the Greatest Generation away from a monument built in their honor," Priebus said. "That's not right, and it's not fair." Priebus said the RNC was willing to pay for five security officers (ideally furloughed employees) "to keep this memorial open to veterans and visitors." Democrats, meanwhile, dismissed the RNC's move a "silly stunt." "We've already been working on a plan to open the Memorial - and the entire government - after the GOP caused them to close," said Democratic National Communications Director Mo Elleithee. "It's called a clean funding resolution."

ABC's DEVIN DWYER: With government in gridlock, our political leaders could stand to be a little more pious - or at least take some cues from Pope Francis. That's what President Obama suggested yesterday at the end of his interview with CNBC. Asked about the Catholic pontiff and his influence beyond the Church, Obama argued that Francis qualities should be a model for "any leader, period." He cited the pope's "incredible humility," "empathy" and spirit, "that sense of love and unity." Needless to say, few of those qualities were on display at the White House last night after a tense meeting between Obama and congressional leaders. Maybe Pope Francis can keep them, and all of us, in his prayers.

ABC's TOM SHINE: Has big business lost its clout on Capitol Hill? The U.S. Chamber of Commerce spent $30 million to elect Republicans in 2012. Monday, the U.S. Chamber sent a letter signed by over 250 business groups to the House of Representatives urging them to pass the CR. "It is not in the best interests of the U.S. business community or the American people to risk even a brief government shutdown that might trigger disruptive consequences or raise new policy uncertainties washing over the U.S. economy." Today begins day three of the government shutdown.

BUZZ

U.S. TREASURY: SHUTDOWN HINDERS IRAN SANCTIONS ENFORCEMENT. The Treasury Department's Office of Foreign Assets Control is responsible for enforcing economic and trade sanctions against Iran and Syria-and it's been pared down to a "skeleton crew" by the government shutdown, a Treasury official tells ABC's CHRIS GOOD. A Treasury official tells ABC News, via email, that the office (OFAC) "is unable to sustain its core functions of: (1) issuing new sanctions designations against those enabling the governments of Iran and Syria as well as terrorist organizations, WMD proliferators, narcotics cartels, and transnational organized crime groups; (2) investigating and penalizing sanctions violations; (3) issuing licenses to authorize humanitarian and other important activities that might otherwise be barred by sanctions; and (4) issuing new sanctions prohibitions and guidance." The Treasury official's comment, provided on background, comes as Iran sanctions are in the public eye. As the U.S. and Iran wade into diplomacy over Iran's nuclear program, Israeli Prime Minister Benjamin Netanyahu warned the U.S. in interviews and in his U.N. speech not to back away from sanctions.

HAPPENING TODAY: President Obama stumps against the shutdown. This morning he delivers remarks at a local construction company on the need for Congress to re-open the government and raise the debt ceiling, ABC's MARY BRUCE notes. According to the White House, "The President will highlight the impacts that a shutdown and default would have on our economy and our nation's small businesses." The president will speak at M. Luis Construction, a local small business that has grown in recent years thanks to increased access to capital through the President's Small Business Jobs Act and other SBA programs, per the White House.

SMALL, GROWING GOP FACTION BUCKS SHUTDOWN STRATEGY. The number of House Republicans who are unhappy with the party's strategy that has resulted in a government shutdown is small, but it is growing and has exceeded the number that would give Democrats enough votes to pass a bill - if the GOP allowed a vote, ABC's ALEX LAZAR reports. According to an ABC News count, 18 Republican members of the House have publicly stated their willingness to vote for a clean CR - a continuing resolution to fund the government without any conditions attached. The bills offered by the Republicans so far insist on defunding Obamacare or delaying parts of it. If every House Democrat were to vote for a clean CR, then only 17 Republican votes would be needed for such a measure to pass. But that would still require Republican leaders, who control the House, to allow such a measure to come for a vote. One Republican lawmaker is suggesting that when push comes to shove, that number could decrease. "Even if you want a clean CR, doesn't mean that you would undermine your team to get it," Rep. Tom Cole, R-Okla., told ABC News. He conceded that some of his Republican colleagues were feeling anxious and nervous, but that the party remained largely unified, at least for now. http://abcn.ws/1brmzGh

THE SHUTDOWN MESSAGE FBI AGENTS DIDN'T WANT TO READ. For FBI agents who've devoted their careers to protecting the U.S. homeland or rooting out major crime across the country, this certainly was not the message they wanted to read at 5:49 p.m. on Wednesday, the second day of the government shutdown: "Unfortunately, whether you are in an 'Excepted' or 'Non Excepted' status, there may be a financial impact to your paycheck." In other words, ABC's MIKE LEVINE reports, if you're furloughed or not, your salary this year may be different than you planned. "Only if congressional action is taken to pass legislation which allows for the retroactive payment of compensation for the time period encompassing the government shutdown, then all employees will be compensated for that time period," said the email to FBI employees, obtained by ABC News. In many ways, the impact of lawmakers' failure to keep the federal government running seems theoretical. But it's not theoretical to the scores of FBI agents now in terrorist-torn Kenya who aren't being paid as they try to figure out if the group that launched a deadly assault in a Nairobi mall last month could strike the U.S. homeland. Nor is it theoretical to the FBI agents, CIA operatives, Border Patrol agents, homeland security investigators, airport screeners, firearms agents, U.S. marshals and other intelligence and law enforcement officials who reported for duty across the country this week without knowing if they'll ever see a paycheck for their current efforts to protect the nation. http://abcn.ws/155qaF5

GOLDMAN SACHS CEO URGES CONGRESS NOT TO USE DEBT CEILING AS A 'CUDGEL'. Emerging from a White House meeting with President Obama yesterday, Goldman Sachs CEO Lloyd Blankfein urged lawmakers not to use the threat of default to achieve political gains and warned that failure to raise the debt ceiling would have "extremely adverse" consequences, ABC's MARY BRUCE notes. "You can re-litigate these policy issues in the political forum, but they shouldn't use the threat of causing the U.S. to fail on its obligations to repay its debt as a cudgel," he told reporters. "We'd like to see the fight not be on this ground." The president and vice president met yesterda with representatives of the Financial Services Forum, including Blankfein, Bank of America CEO Brian Moynihan and JPMorgan Chase CEO Jamie Dimon, to discuss the impacts of the government shutdown and the upcoming deadline to raise the debt ceiling. The president has said he will not negotiate over the need to increase the nation's borrowing authority, but Republicans have made clear they will expect some form of political concession in exchange for raising the debt ceiling. "There's no debating the seriousness of the U.S. not paying its debt," Moynihan told reporters. http://abcn.ws/GzY0Zs

HELLO, SENATOR? IS THAT YOU? The phones are still ringing in Washington, D.C., offices, where furloughed congressional staffers once roamed. So some U.S. senators have stepped up to take their own constituents' calls, ABC's ARLETTE SAENZ reports. "Let 'em rip baby!" Sen. Joe Manchin, D-W.Va., said as he sat down at the front desk of his Capitol Hill office to take phone calls this afternoon. Manchin's office has been downsized to 11 staffers from 27 since the government shut down Tuesday, prompting the West Virginia senator to take his turn at manning the phones. "This morning, I was about as frustrated as anybody and I thought this was senseless and ridiculous, and I looked out here and most of my staff's all gone because we had to lay them off, furlough them, if you will," Manchin said. "I saw the phones lit up, and I just sat down and started talking to people this morning and go to meetings and come back and grab them again and in between meetings I just keep answering the phone … It gives me a good understanding of the frustration level and the people that are being hurt and the people that are scared," he added. Sen. Dean Heller, R-Nev., has been taking shifts on the phones since the shutdown started Tuesday and has encouraged his colleagues to follow suit. http://abcn.ws/19VY5Q6

WORLD WAR II VETERANS PROVE UNSTOPPABLE. Another day, another barricade crossed. Following the example set on Tuesday by a group of fellow veterans from Mississippi, World War II "honor flights" from Missouri, Illinois and Michigan entered the closed World War II memorial on Wednesday, past a blockade erected because of the government shutdown, according to ABC's NICKI ROSSOLL, ANNETA KONSTANTINIDES, MATTHEW LAROTONDA and JACK DATE. The first busload of veterans arrived to a circus of media and members of Congress just after 11 a.m. Several members of Congress who were on hand opened the barricades, allowing the veterans access to the memorial. Since then, several hundred of them have passed through the gates. According to the National Park Service, the memorial remains officially closed, but a statement released by the department states Honor Flight members will not be barred from entering the site. "The Honor Flights are being granted access to the WWII memorial to conduct First Amendment activities in accordance with National Park Service regulations applicable to the National Mall and Memorial Parks," said National Park Service Spokeswoman Carol Johnson in a statement regarding the closure of World War II and other national memorials in DC. http://abcn.ws/16ZgFUi

FACT CHECK: RAND PAUL LINKS MONUMENT CLOSURES TO BENGHAZI. Republican Sen. Rand Paul sent out a tweet yesterday comparing security at the WWII Memorial with the security present during the attack on the U.S. consulate in Benghazi, which killed four Americans including Ambassador Chris Stevens, ABC's DANA HUGHES and MATTHEW LAROTONDA write.

@SenRandPaul : . @BarackObama sent 7 security guards to #WWIIMemorial this AM to keep out our vets. Sadly, that is 2 more than were present in Benghazi.

A SOBERING COMPARISON, BUT IS IT ACCURATE? An ABC News reporter was present at the memorial for several hours and didn't spot seven security guards keeping veterans away, but did observe the barricade being pushed aside without incident allowing the veterans to see the monument. One security guard was even spotted helping an elderly vet walk up a steep decline. The National Park Service has also stated that it will not keep the veterans from visiting the memorial, calling their visits a First Amendment issue that supersedes the shutdown. As for the Benghazi comparisons, though it is true that the State Department's independent review board found that security was inadequate during the attack, it is not accurate to say there were only five security guards guarding the entire compound. The Diplomatic Security agents Paul is referring to were on detail to guard Ambassador Stevens alone. The compound was in fact being guarded by several local militiamen, though again the review found the men were not equipped to handle such an assault. http://abcn.ws/18PEtim

WHAT WE'RE WATCHING

-RETURN TO MOGADISHU: FORMER ARMY RANGER REVISITS 'BLACK HAWK DOWN' 20 YEARS LATER. Twenty years after retired U.S. Army Ranger Jeff Struecker led a squad of elite forces into Mogadishu on a failed rescue mission that inspired the film "Black Hawk Down," he returned to the site of the battle in Somalia and said the memories of the 17-hour-long firefight came rushing back. "When I went back there this spring and turned the corner into the Bakaara Market, immediately the emotions, the smells, the thoughts from Mogadishu came flooding back like I was just there yesterday," Struecker said. Struecker sat down with "Power Players'" MATTHEW DOWD to discuss a new documentary, "Return to Mogadishu: Remembering Black Hawk Down," that follows his trip back to Somalia. http://yhoo.it/174BaA6

-FURLOUGHED WORKERS CALL DEADLOCKED LAWMAKERS "CHILDISH," but Washington, DC synagogue gives them a place to hang out, do yoga, play ping pong all for free: http://abcn.ws/1a1Pco4

WHO'S TWEETING?

@JohnJHarwood: Obama on crisis budgeting/governance: "we need to break that fever. Have to stop doing that." http://nyti.ms/15N7zLe

?@PostReid: RGA chair Bobby Jindal: "As governors, we're no longer content to outsource our brand to Washington DC." Lots implied there.

@ezraklein: Wonkbook: Why the shutdown will be so hard to end, in one perfect quote http://wapo.st/172i50y

@ByronYork: 'I don't think GOP could come up with a tax reform package by October 17. There is a huge range of opinion on what direction to take.'

@robertcostaNRO: Ryan's shepherding of larger fiscal deal project behind scenes makes it diff't than a pitch that's just Boehner working alone

More ABC News