ROBERT COSTA: The government remains shut down.

I'm Robert Costa.

Welcome to Washington Week.

PRESIDENT DONALD TRUMP: (From video.)

I can't tell you when the government's going to be open.

I can tell you it's not going to be open until we have a wall, a fence, or whatever they'd like to call it.

ROBERT COSTA: The government shutdown extends into 2019 as President Trump and Congress battle over funding for a border wall.

And Washington uncertainty comes amid volatility on Wall Street.

Plus, the president makes his first trip to a combat zone and defends his decision to draw down troops in Syria.

PRESIDENT DONALD TRUMP: (From video.)

We're not the suckers of the world.

We're no longer the suckers, folks.

We're respected again as a nation.

ROBERT COSTA: We cover it all next.

ANNOUNCER: This is Washington Week.

Once again, from Washington, moderator Robert Costa.

ROBERT COSTA: Good evening.

The federal government shutdown heads into the new year, with President Trump demanding 5 billion (dollars) for a border wall.

The president's standoff with Democrats has consequences, as hundreds of thousands of federal employees work without pay.

About 380,000 federal employees have been furloughed and have not yet been guaranteed their back pay; that's according to the Associated Press.

Another 420,000 employees, including air traffic controllers, have been deemed essential and are working without pay for now but will eventually be paid once the government reopens.

Joining me tonight, Shawna Thomas, Washington bureau chief for Vice News; Brian Bennett, White House correspondent for TIME Magazine; Lisa Desjardins, congressional correspondent for the PBS NewsHour; and Erica Werner, congressional correspondent for The Washington Post.

On Friday this war of words, it took another turn: President Trump threatened to close the border if his demands are not met.

And the acting White House chief of staff, Mick Mulvaney, blamed incoming House Speaker Nancy Pelosi for the impasse.

ACTING WHITE HOUSE CHIEF OF STAFF MICK MULVANEY: (From video.)

This all comes down to Mrs. Pelosi's speakership.

I think left to his own devices that Chuck Schumer and the Senate Democrats probably would cut a deal, but they're protecting Mrs. Pelosi.

She does not have the votes, and if she cuts a deal with the president of any sort before her election on January 3rd she's at risk of losing her speakership.

So we're in this for the long haul.

ROBERT COSTA: "We're in this for the long haul."

The rains over Washington, Erica, the shutdown continues.

The acting chief of staff is there on the White House Lawn talking to reporters.

But where are the talks right now?

Where is the urgency?

ERICA WERNER: Isn't that interesting?

There is no urgency.

There are no talks.

The Capitol is completely deserted.

All of the congressional leaders are at home.

UK and Louisville are playing each other in basketball tomorrow; Senator McConnell is going to be there, in all likelihood.

It's very unlike past shutdowns, where you had negotiations that were ongoing, you know, moment by moment until it was resolved.

That is not the case this time.

There's just kind of an understanding that this doesn't get resolved until Democrats take over the House on January 3rd, and so we'll wait and see what happens then.

ROBERT COSTA: Why is that, Brian?

You were on the ground with President Trump in Iraq this week.

Is he playing toward the base here?

Is that why he's digging in?

BRIAN BENNETT: President Trump wants to be talking about border security.

He wants to be talking about the wall.

That's what he wants to talk about all next year.

He really thinks it's winning with his base, and he wants to put the Democrats on the spot on it.

So he's very comfortable having this fight right now.

There are certain people in the White House who have advised him to do this; it's not a hundred percent.

So this is something that he wants to do, and he seems like he wants to dig in and try to make a point.

He hasn't made any plans to go down to Mar-a-Lago at this point.

He may miss the big annual Mar-a-Lago New Year's Eve party.

ROBERT COSTA: Lisa, when you think about the political cost, the base may love the president fighting for this border wall, but what about the federal employees?

What's their reality at this moment?

LISA DESJARDINS: I've spent the last couple of days talking and tweeting with and emailing with many, many federal employees.

Right now you're in a situation where kind of the worst-case scenario is for most federal employees they could miss - the next paycheck would be January 11th.

And we just got some news, Coast Guard employees were different, active duty.

There was some news.

They had thought they might be missing their paycheck Monday; I just - the Coast Guard just told me there's an update that they will get that paycheck on Monday.

That's a big deal.

But overall, I talked to people who have delayed surgeries because they're worried about not getting enough money to pay for copays, people who have delayed closing on homes.

That's where we are.

Nobody's missing mortgage payments yet, but they're nervous that could happen in the next couple of weeks.

SHAWNA THOMAS: And those are the stories that are going to start to maybe change this conversation.

As people miss paychecks, people who live month - paycheck to paycheck, month to month, those are the stories that media people like us are going to start to tell.

We're going to go find those people in the middle of the country - outside of Washington, D.C., where lots of government workers work - and that is going to get - that's going to increase the pressure on the president, as well as Nancy Pelosi.

ROBERT COSTA: Shawna, so what does the incoming House speaker, Nancy Pelosi, do when she likely wins the gavel this week in a House floor vote?

Does she move immediately to reopen the government without border funds?

SHAWNA THOMAS: Yes, she definitely moves immediately to do some kind of combination of things, whether that's try to put the bill on the floor that the Senate passed a version of before they left that funds the government through February 8th with no border funds or try to move a continuing resolution to just fund the rest of the government through sort of October 1st.

One of those options, Nancy Pelosi is going to move to do that to show that she can pass it and punt it over to the Senate.

What does Mitch McConnell do?

Well, when I talked to, you know, some people in the Senate and the House, Mitch McConnell and Nancy Pelosi also haven't talked.

We know the president hasn't really spoken with Nancy Pelosi any time lately.

Mitch McConnell also has not spoken with Nancy Pelosi.

ROBERT COSTA: How hard is that $5 billion number for the White House, Erica?

Are the - I know that talks are pretty nonexistent, but has the White House given any private signal to Democrats that they'd be willing to ask for a lower number?

ERICA WERNER: Yeah, well, the last thing that kind of happened before things stopped happening was on Saturday there were talks on the Hill.

Vice President Pence was up there, along with Mulvaney and others, and the White House did come down substantially.

They came down to 2.5 (billion dollars), so they cut that figure in half.

The problem, though, from Democrats' perspective is they don't want to be negotiating with Pence or Mulvaney or anyone but Trump because they feel like any deal they strike with anyone that's not Trump, Trump could turn around and pull the rug out from under.

We saw that happen when Mitch McConnell forced the Senate to pass a short-term bill to February 8th that did not have that border wall funding.

That was done on the understanding that Trump would support that bill.

The very next morning he did a turnaround under pressure from conservative press and lawmakers, and he withdrew his support.

And here we are.

ROBERT COSTA: Why is the White House acting like it has leverage, Brian?

They keep moving in an aggressive way to talk about militarizing the border or shutting down the border.

Do they actually believe that Democrats will break for that?

BRIAN BENNETT: Well, I think Trump has sent mixed signals.

He's created some openings for negotiation where he's said things like, you know, you could call it a fence or a wall, you could have slats.

So that does create an opening for a discussion about the definition of a wall.

But then, in his most recent tweet when he talked about shutting down the border, that, from his perspective, is trying to create leverage; like, I'm going to make the stakes even higher here if Democrats don't come to the table.

SHAWNA THOMAS: Well, but here's the problem, right, that it's really not about $5 billion.

This federal government could find $5 billion if it wanted to find $5 billion.

It's about the fact that the wall is a symbol of something.

For Democrats, the wall is a symbol for keeping others out.

It's a symbol of racism.

It's a symbol of all the things that they supposedly ran against especially in 2018, that Nancy Pelosi has to hold the line on, and I think some of which Nancy Pelosi believes herself.

For the president, it is a campaign promise.

It is a symbol of America first.

And how you argue around a symbol, when it really isn't about the money - because 5 billion (dollars) just isn't a lot in our government.

ROBERT COSTA: Is that symbolism important?

Because you think about, the Congress just passed an $867 billion farm bill, and yet the thing that's shutting down the government is 5 billion (dollars), or 1.6 billion (dollars), or 2 billion (dollars) over a border wall.

Does this tell us a lot about divided government next year, how it's going to look?

LISA DESJARDINS: Yeah, Shawna nailed it.

It's not just symbols, it's also semantics, right?

Because think about it, the bill that the Senate passed unanimously - Republicans and Democrats - actually did have money in it for border security.

It could have gone to, I think - it looks - senators will tell you, it could have gone to a potential steel slat fence, which is what the president says now that he wants.

But that's the exact deal he rejected.

So there's a problem of shifting messages from the president but also semantics in a divided Congress, that is - they're both trying to find their way with voters on a very big issue.

ROBERT COSTA: So what's so interesting about all this is that we have the semantic debate, the political debate, but this is real world stuff.

And while this debate was unfolding in Washington this week Homeland Security Secretary Kirstjen Nielsen traveled to Texas on Friday to inspect detention centers following the death of a second migrant child in Border Patrol custody.

An 8-year-old boy died just hours after he was treated at a hospital on Christmas Eve earlier this month.

A 7-year-old girl also died while in U.S. custody.

Nielsen announced that the agency would be expanding health screenings for children and may request further aid in medical care.

Erica, talking about divided government next year, House Democrats, they're positioning in the shutdown fight, to be sure, but also looking about at hearings and investigations into the Trump administration on immigration.

ERICA WERNER: Yeah.

This is disturbing stuff, obviously, with what's going on with these two kids in particular, and the separated families more broadly, and definitely something Democrats will look at, hold hearings, et cetera.

And when you talk to Republicans, those that support the president, they generally feel like immigration is a winning issue for them and they support the president, except when it comes to - when the spotlight is on the kids and the family separations.

That's when it gets very difficult politically for Republicans.

And Democrats, not just because it's politics but it is good politics for Democrats, will definitely be focusing on that.

ROBERT COSTA: When you think about divided government in the past, when presidents have been humbled at the ballot box, they sometimes move toward the center.

Is this White House moving more toward the right rather than toward the center, in particular on immigration?

BRIAN BENNETT: Definitely on immigration they're moving towards the right.

And I think that Trump feels like this is an animating issue for 2020, for his race.

And he's probably not going to give up much on this.

I mean, it's a - they're in a very difficult spot on the border right now because the Trump administration's policy has been to hold children and families longer to try to create a deterrent, when what's happening is more and more families and children trying to cross the border illegally, and it's jamming up the system.

LISA DESJARDINS: And in truth this is something Republican senators have been saying privately since we started seeing these family separations.

They have been very uncomfortable with this, but they have not been able to figure out how to deal with it.

Ron Johnson, the chairman of the Homeland Security Committee, told me personally he - at one point, he was thinking of having hearings.

He ended up not going that direction.

They're very nervous about that.

So in some sense, Democrats in the House taking over this issue is a relief to some Republicans, especially in the Senate, who are uncomfortable with it.

ROBERT COSTA: And how are we seeing the incoming Speaker Nancy Pelosi deal with the new dynamics in the House Democratic conference?

You have a lot more progressives, younger progressives.

Are they trying - are they preventing her from maybe cutting a deal on this shutdown?

SHAWNA THOMAS: I'm not - I don't actually think that's one of the things preventing her from cutting a deal.

I think Nancy Pelosi believes that in this immigration issue that her base, the Democratic base, wants to be inclusive in a certain way, that she can't lose that immigration issue.

And that isn't because of these new members.

That's because Nancy Pelosi understands Democratic politics.

ROBERT COSTA: Let's talk about the other big issue this week.

The president and first lady made a surprise visit to Iraq.

It was Mr. Trump's first visit to a combat zone while in office.

It also came just a week after he rejected recommendations from military commanders and announced that he would be withdrawing all U.S. troops from Syria.

His decision prompted Defense Secretary James Mattis to resign.

Brian, you were on that trip, a surprise trip to Iraq.

With the Syria decision looming over it, how did that shape the president's remarks and the whole trip?

BRIAN BENNETT: Well, I think the Syria decision was one of the reasons he really wanted to do this trip.

He's been under pressure for months to visit a combat zone, which he hadn't done in his first two years in office.

And then he made this big decision without really consulting the national security apparatus to precipitously start withdrawing U.S. troops from Syria.

So I think he felt like he wanted to go, he wanted to show himself in Iraq, and he wanted to show that he was going to double down in Iraq to offset what he was doing in Syria.

And so I think that really informed his decision to do it.

ROBERT COSTA: What was it like to be in the room, President Trump, his first trip in this kind of setting?

BRIAN BENNETT: So President Trump was really focused on the visuals.

So he really wanted his first appearance there in Iraq to be at this table with some of the military leadership, surrounded by people in uniform, and he looked like he was running a meeting.

He came out of there and said: We came up with a great plan for victory.

We're going to - even though we're pulling out of Syria, we have plans to be really successful.

And then he went into the dining hall, and there were about more than 100 soldiers there in uniform.

And they cheered him as he walked in.

Some of the soldiers had brought red MAGA hats - make America great again hats - and asked him to sign them, which created its own controversy and discussion about whether the military was allowing itself to be politicized.

And then he spoke to a hangar full of hundreds of uniformed troops.

And in that, he broke with convention and made political remarks about Nancy Pelosi, and saying the Democrats don't support border security, which usually when our commander in chief goes overseas, past presidents, they don't bring politics into it.

ROBERT COSTA: Erica, you look at Capitol Hill and you have Senator Bob Corker, the chair of Foreign Relations retiring.

You have Jim Mattis, the secretary of defense, heading to the exit.

Who's going to fill the void for Republicans on foreign policy in Congress next year?

ERICA WERNER: Well and, of course, Senator McCain was a very strong voice on these issues.

And with Corker leaving, there really is going to be a void.

As far as a senator with gravitas who will be challenging the president and the administration on foreign policy you have Senator Risch of Idaho, who's not very well known outside of his state - former governor of Idaho - who will be replacing Corker as chairman of the Foreign Relations Committee.

He's someone who is a Trump supporter, even though he was kind of a skeptic before the election.

But he's actually criticized Corker for the way Corker has been critical of Trump and said that he'll air any disputes he's had - he'll have with the administration behind closed doors and not out in public.

So I think it's going to be a Senate that follows the administration rather than challenging it.

ROBERT COSTA: Lisa, Brian brought up the signing of the make America great again hats, the militaristic language from President Trump.

At the same time, he's removing troops from Syria.

Is this president militaristic, a hawk, or is he a non-interventionist?

LISA DESJARDINS: Wow, that is a very big question.

I see Ph.D. thesis for the next 20 years on this topic, if not longer, and books.

I think - I think it really - he is situational.

And I think that he certainly cares about his military posture, how he's perceived as a commander.

But I think it has yet to be seen what type of information about America's military is he reacting to.

Is he thinking strategically?

And how?

It's really not clear.

And a problem for congressmen in particular is he's not communicating with them at all.

They were completely surprised by the Syria withdrawal.

And these are senators who spend their lives, have enormous staff, expertise on these issues.

And yet - and oversight of them.

And yet, they were not involved.

So it's tricky.

ROBERT COSTA: That gets at a key point, that some Republicans may actually like the policy, but they don't like the process.

SHAWNA THOMAS: Yeah.

And they're still struggling with how do you communicate that?

And I think you're going to continue to see them struggle more.

And I think in terms of, like, foreign policy voices, we will still be asking Lindsey Graham to tell us how he feels about these things, when the president's going to pull out without - you know, without telling anyone beforehand.

Lindsey Graham is probably still going to speak up to a certain extent.

The Marco Rubios of the world will speak up to a certain extent.

But they're never going to actually know what the president is going to do before he does it.

ROBERT COSTA: Let's get into that a little bit, because as we say goodbye to 2018 and we look ahead to the new year and the stories you'll be following, the Trump administration has quite a few staff changes.

And the president begins the year with a number of people serving in acting positions, including the attorney general, defense secretary, and the White House chief of staff.

Let's go around the table just for the final few minutes.

Brian, you think about that White House, the upheaval there, all these concerns in the party - both parties - about process, how is President Trump dealing with this flux?

BRIAN BENNETT: So he's a guy for decades who's managed through chaos, and he's written about that, so I think he likes that, and he likes people to feel on edge who are working for him.

And certainly he's lit a fire under Chief of Staff Mulvaney, who now has to prove himself in his position, and others.

So I think he's used to that.

And we're going to see more turnover, I think, in the new year.

ROBERT COSTA: And the big issue for you in 2019?

BRIAN BENNETT: I'm going to be watching how Trump reacts to the stock market and its continued volatility.

And I'll also be watching, of course, more revelations coming out of the Mueller investigation, and whether that prompts Trump to take more actions in the Justice Department.

ROBERT COSTA: Is the Fed Chairman Jerome Powell safe?

BRIAN BENNETT: You know, you would hope that, yes, he would be safe and that we'd continue this longtime approach which has preserved our stability in the markets of having a political separation between the Fed chairman and politics, but we don't know.

This is a - this is a new president.

We've never had a president like this in recent memory.

So we hope that he is able to respect those norms that have led to market stability for that reason.

ROBERT COSTA: Erica, we talked earlier about the House Democratic conference.

I know you're such a student of the House and the incoming speaker, Pelosi.

I'm fascinating by Alexandria Ocasio-Cortez, this new member from New York, really part of this new left, the rising left in the country.

How does Leader Pelosi, incoming Speaker Pelosi, deal with these dynamics?

How do you see it?

ERICA WERNER: Yeah, I think that's going to be one of the most fascinating storylines to watch next year.

You referenced Ocasio-Cortez, who of course is a big star, but a lot of the newly elected Democrats, most of them come from red-to-blue districts, moderate districts.

Some of them had to pledge not to vote for Pelosi.

So you have intense cross pressures there that are already creating problems on issues like taxes, climates where she's not finding agreement.

So she's a master at managing her members.

We'll see how she does it, but it's going to be interesting to watch.

ROBERT COSTA: What about 2020?

We don't even get much time to talk about presidential politics on this show, Shawna, but we know about Beto O'Rourke, the Texas congressman who's getting a lot of buzz.

We know about Vice President Biden, Senator Sanders.

But are there other names out there we should keep an eye on?

SHAWNA THOMAS: I mean, there are so many names - (laughter) - on the Democratic side, like - ROBERT COSTA: Who are you - who are you watching?

SHAWNA THOMAS: You know, here's my one weird thing, who hasn't announced and doesn't have an exploratory committee.

I'm still watching Mitch Landrieu, the former mayor of New Orleans, because he is a, you know, late-50s-something mayor who helped New Orleans out after Katrina.

He's not afraid to talk about race.

He brought the Confederate statues down in New Orleans.

And in some ways I'm looking at him because he's a white male and there's a question of, like who can bring some of the, basically, white suburbans who left the Democratic Party and voted for President Trump back in, and that's also why people are looking at Biden and other people.

I think there's something interesting about Mitch Landrieu.

He's also personable, and he's good on the stump.

ROBERT COSTA: Is there a path, though, for a Mitch Landrieu, or a Michael Bloomberg, or even a Vice President Biden in a Democratic Party that sees a lot of energy on the left?

SHAWNA THOMAS: Well, with Michael Bloomberg there's a lot of - money creates paths, so - (laughs) - there I think there is a path for the Michael Bloombergs of the world.

And Joe Biden's the former vice president.

Mitch Landrieu has a little bit more of a problem with money than Michael Bloomberg does, but I think - I think what the path is - politics is different now because of President Trump.

And with it could be 40 people running for the Democratic nomination, the path may be through California.

If you have enough money to show up there, since their primary is going to move up, maybe that's the path now.

ROBERT COSTA: And, real quick, Beto O'Rourke; a year from now, will we still think there's buzz around this Texas congressman?

I know we don't like to predict too much, but - SHAWNA THOMAS: I think so because there's a world where maybe we're talking about Beto O'Rourke also for a vice presidential spot.

I think we're still talking about him a year from now.

ROBERT COSTA: The shutdown is dominating this holiday week, but what else should we have on our calendar for next year in terms of standoffs, shutdowns, showdowns, whatever they are?

LISA DESJARDINS: I think we should expect more shutdown showdowns.

I think that's very likely in the cards.

We've seen three this year, and shutdowns seem to come in clumps.

Ronald Reagan had eight of them.

But it's notable that this one in particular is the first time that we've seen workers sent home from the federal government when one party was in control of all branches.

And I get the Senate and 60 votes, yadda, yadda, but it's significant.

I think also we need to watch spending.

Right now the interest on our deficit - I'm going to get a little nerdy - the interest that we're paying right now is about $370 billion a year.

That could double in 10 years.

And to give some perspective, because that's a number that doesn't make any sense to me - almost $400 billion - that's more than half of the Pentagon's budget.

So we're paying a lot of money in interest.

It's going to get worse.

It's going to be a really big problem for this country, and it's starting to show up on polls of Republicans as a concern.

They need to deal with spending this year as budget cuts are slated.

ROBERT COSTA: What happens with the debt limit?

LISA DESJARDINS: Yeah, that's something that the president is going to have to make a decision.

Is he going to use that - ROBERT COSTA: Is that in the spring, or?

LISA DESJARDINS: - he has a choice - or not?

And Mitch McConnell has repeatedly said he does not want to play games with the debt limit, but with this president he may not have that choice.

We'll see.

SHAWNA THOMAS: The debt limit's leverage.

LISA DESJARDINS: Debt limit leverage, right.

ROBERT COSTA: But, as Brian was saying, the economy's volatility may push some members, even hardline Republicans, away from using it as leverage, or no?

SHAWNA THOMAS: I mean, it hasn't really stopped them from using it as leverage before on both sides, so I think - I think if the president sees that as another leverage point that he may very well use it.

ERICA WERNER: I mean, McConnell said he didn't want to shut down the government and wouldn't shut down the government, and here we are, so.

LISA DESJARDINS: That's right, right.

ROBERT COSTA: Who's actually going to stand up to President Trump in the Republican Party next year?

ERICA WERNER: I don't know.

I mean, we'll find out if anyone does.

Senator McConnell is in cycle.

Shawna mentioned Rubio, who, you know, occasionally speaks out.

ROBERT COSTA: What about Senator-elect Mitt Romney?

ERICA WERNER: Could be.

SHAWNA THOMAS: I mean, I think people are watching to see who Mitt Romney is going to be in the Senate because he's - ROBERT COSTA: Who is he going to be?

SHAWNA THOMAS: Well, Mitt Romney I don't think is necessarily scared of President Trump's base.

I think Mitt Romney knows who his base is.

I think he feels pretty confident.

It may be that everyone looks to Romney, also because he has a name and people want to interview him.

ROBERT COSTA: And we haven't even mentioned Robert Mueller.

BRIAN BENNETT: Yes, that's a whole 'nother thing that's going to come out next, is more Mueller.

ROBERT COSTA: It's more than a whole 'nother thing.

(Laughter.)

LISA DESJARDINS: Sometimes I think the biggest counterdirectional force to the president is the same person who is his number-one counselor: himself.

You know, so if he changes direction, I think it's something to do with his own instincts.

ROBERT COSTA: We'll see.

Divided government, and you never know what happens in divided government.

But before we go tonight, we'd like to pause and remember a talented leader in the WETA family: Anne Harrington, who passed away this week.

Anne was a gifted and creative colleague who set high standards as vice president for national engagement and interactive media.

She worked on many national productions, including documentaries by Ken Burns and Skip Gates.

Our thoughts are with her husband, Simon, and her two teenage daughters, Sydney and Sally.

I'm Robert Costa.

We'll see you next week and next year.