The government runs out of money in a month, and the White House and Congress have yet to strike a deal to keep the funds flowing.
The deadline for lawmakers to approve a federal government budget is April 28. Between now and then, there are just eight legislative days, and Capitol Hill isn't exactly overflowing with consensus at the moment. (See the president's tweets targeting the left and the right.) A 2013-level government shutdown could happen if the White House, Senate and House of Representatives can't piece together a plan to stay afloat.
"Let me just say this, Norah. We're not going to have a government shutdown," he said. "The president doesn't want to have a government shutdown. It's funding from April 28th to September 30th."
Press Secretary Sean Spicer speaking to reporters on Thursday said "obviously" the administration does not want the government to shut down, but "we want to make sure that we're funding the priorities of the government."
Nomura analysts in a note this week said they believe the probability of a government shutdown on April 29, Trump's 101st day in office, has increased but remains low.
"In the current circumstance, there is a possibility that the Republicans will propose changes that the Democrats in the Senate will object to," analysts wrote. "However, the Republican leaders are likely to want to avoid a government shutdown as they have proven unpopular with the public. Additionally, after the failure last week in the House to repeal and replace the Affordable Care Act, Republican leaders have an increased incentive to show they can lead."
The White House is seeking $30 billion increase for defense spending and a border wall and at the same time calling for an $18 billion spending cut to programs like medical research, infrastructure and community grants -- a maneuver not particularly popular among Democrats or many Congressional Republicans.
"As much as I and other Republicans are fans of cutting wasteful spending, the NIH is not a place to cut given its important role for the United States and its people," said New York-based Republican strategist Evan Siegfried, referring to the National Institutes of Health, where the administration is proposing spending cuts.
Democrats have indicated they won't vote for a budget that includes poison pills like defunding Planned Parenthood or the wall, and in the Senate, 60 votes are required. The current split is 52 Republicans, 48 Democrats.
Joseph Gagnon, senior fellow at the Peterson Institute for International Economics who formerly served at the Federal Reserve and U.S. Treasury Department, said Democrats will be the key to avoiding a government shutdown in April and, more broadly, raising the debt ceiling, which expired this month.
"They don't agree with most of what Republicans are proposing, so it's only natural to vote no. But as far as the debt ceiling goes, I don't think that was a winning strategy for Republicans to oppose debt ceiling increases before," he said. "It should be the one thing that they don't obstruct, because they're not opposed in principle."
"I don't think we liked it when it was in reverse," said former New York State Democratic Party Chair Jay Jacobs. "At some point in time, we have to get back to governing responsibly -- both parties."
The likely path forward will be for Congress to pass a continuing resolution to fund the government through September.
Growing cracks in the Republican coalition could prove problematic. The president attacked the ultra-conservative House Freedom Caucus on Twitter again on Thursday morning.
"There is no message from the Republican Party right now and Republicans. Democrats are winning the messaging war," said Siegfried.
The likeliest outcome of the budget showdown, assuming lawmakers are able to strike a deal, will be a continuing resolution to fund the federal government from the end of April through the end of September. As Nomura notes, continuing resolutions have become the norm in federal budgeting -- there has been at least one CR in 33 of the last 36 fiscal years and 161 CRs total.
Since 1982, the federal government has had 12 shutdowns, usually lasting an average of five days. The last time it happened was from September 30 to October 27, 2013.
The S&P 500 has on average declined about 0.7% during government shutdowns, according to data from Charles Schwab, but during the 2013 shutdown it actually gained 2.4%. The Bureau of Economic Analysis estimated that the direct effect of the shutdown on GDP growth for the fourth quarter of 2013 was 0.3 percentage points.
But if the government does shut down in April, the fallout could be a bit harsher, given growing concerns about the Trump administration and Congressional Republicans' ability to get things done.
"Perhaps the largest effect would be the market's reaction to the Republican's inability to successfully govern, leading to further questions about their ability to deliver on their promises," Nomura analysts wrote.
Updated with comments from Sean Spicer.
Editor's Pick: This story was originally published on March 30 at 2:41 p.m.