The federal agency that runs the U.S. immigration system is preparing to furlough 13,400 employees unless Congress provides a $1.2 billion bailout by August, a looming crisis that could further slow green card renewals, citizenship processing and ripple through the U.S. economy.

U.S. Citizenship and Immigration Services employees around the country began receiving notices this week telling them to prepare for the unpaid furloughs, which would affect about two-thirds of the agency’s staff.

But with the deadline a month away, significant obstacles to a bailout deal with Democrats remain, according to congressional staffers and Department of Homeland Security officials who described secret negotiations on the condition of anonymity.

The agency derives 97 percent of its revenue from the fees it collects from applications for citizenship, work permits and other immigration benefits. Like many commercial businesses squeezed by the pandemic and the economic crisis, the agency’s customer base has dried up, and officials say revenue has dropped by half since March.

Democrats are wary of an emergency funding package that doesn’t include policy concessions, because the White House has used the agency as an instrument in its efforts to tighten immigration enforcement.

President Trump’s opponents want the agency to make administrative changes to streamline application processing and ease the in-person requirements for administering the oath of citizenship. Hundreds of thousands of people have been unable to take the oath in recent months because of the novel coronavirus pandemic, leaving potential voters in the next election unable to cast a ballot in November.

But Democrats have limited leverage in negotiations with a White House that is campaigning on its record of cutting immigration.

“To the extent that there are people who would like to see a serious slowdown in legal immigration, this would absolutely accomplish that, and not only in the short term,” said León Rodríguez, who ran the agency from 2013 to 2017.

Rodríguez said Citizenship and Immigration Services is “a huge machine” that will suffer systemic damage from the suspension of so many employees.

“It’ll take a lot of work to crank it down and a lot of work to crank it back up again and recover from the lost productivity of whatever the duration of the furlough is,” he said.

The White House might want to avoid further antagonizing pro-business Republicans by presiding over a breakdown in the legal immigration system. Trade associations and business groups whose members depend on immigrants for both skilled and unskilled labor already are frustrated with the Trump administration over its recent decision to slash work visas and bar several categories of immigrants through the end of the year.

Homeland Security and the White House Office of Management and Budget have written to lawmakers supporting the agency’s request for the loan. But the OMB did not make a formal request itself, and congressional staffers and DHS officials say they view the lack of direct White House involvement as a sign that Trump administration officials lack a sense of urgency about cutting a deal.
On Wednesday, Rob Kuhlman, an OMB spokesman, disputed claims that the White House has not pressed for a USCIS bailout: “The administration has provided Congress with all the information they need to do their job,” he said.

Ken Cuccinelli, the senior official performing the duties of the director at USCIS, has remained distant from negotiations, leaving the task to Joseph Edlow, the agency’s deputy director for policy, who has assumed responsibility for day-to-day operations.

“This week, thousands of dedicated public servants received possible furlough notices, causing concern for their livelihood during these challenging times, and the last thing we want is for Congress to play politics with our workforce,” Edlow said in a statement to The Washington Post on Tuesday. “We are committed to seeing USCIS continue our work to administer the nation’s lawful immigration system, and overall our conversations with Congress have been overwhelmingly positive and productive.”

Unlike Cuccinelli, Edlow is not viewed by Democrats as a polarizing, partisan figure, but congressional staffers and DHS officials say he does not appear to have the authority to make deals or concessions on his own.

“It seems that some in the White House refuse to act so they can cripple USCIS and further a top goal of this administration to drastically reduce legal immigration,” Rep. Bennie Thompson (D-Miss.) said in a statement. “Now, thousands of dedicated federal employees and immigrants who have patiently waited for years are unfairly caught in the middle.”

“If those at the highest levels of this administration were interested in keeping this critical homeland security component open, they would submit an emergency funding request and engage with Congress instead of being missing in action,” Thompson added.

There also is lingering frustration among Democrats over the last immigration-related emergency funding request from DHS — a $4.6 billion border supplemental last year that some Democrats warned would be misused.

The money was approved, dividing moderates and progressives in the party. But a report issued by the Government Accountability Office found that U.S. Customs and Border Protection illegally spent some of the humanitarian funds on dirt bikes, computer gear and other items.

Democratic lawmakers “have been frustrated to see appropriated money not used as intended,” one congressional staffer said. “Now they’re being asked again to bail out a component that has been used as an enforcement arm of the administration.”

The consequences of not bailing out USCIS could be worse, however. Temporary closures of the agency’s service centers already have stretched processing times. for green card applications, work permits and other benefits.

A partial shutdown also would leave thousands of employees without a paycheck and dependent on unemployment assistance, and at least by keeping them in their jobs they will be able to run the country’s immigration system closer to full strength, observers say.

Before the pandemic, USCIS administered the oath of citizenship to about 63,000 immigrants per month, people who are typically able to register to vote immediately after completing the naturalization ceremony. Lawmakers from both parties have urged Homeland Security officials to allow naturalization applicants to take the oath of citizenship via videoconference. The agency has not done so, but some regional offices have begun to experiment with drive-through ceremonies and other alternatives to mass gatherings where the virus could spread easily.

USCIS also has long-term structural problems with its revenue model that the pandemic has made more acute, a frustrated career staffer said.

“We need to take a hard look at our business model,” said the official, who was not authorized to speak to reporters. “You can’t just keep adding enormous requirements, because every action will have a reaction in terms of dollars and cents.”

USCIS processes about 8 million applications for various benefits annually, and because the agency is run like a business, its financial health depends on a stable or growing customer base of immigrants seeking new benefits.

Under Trump, the number of application approvals for green cards, refugee resettlement and other categories of immigration visas has been falling, and the White House has added new application requirements and verification checks that have increased the workload.

Proposals to increase fees for citizenship and other applications have stalled. Other services USCIS provides, including asylum processing, Temporary Protected Status (TPS) renewals and DACA (Deferred Action for Childhood Arrivals) require subsidies because their fees are waived or set too low, agency officials say, leaving gaps that can only be filled by robust applications from new immigrants and workers.

“Migration patterns are changing, and what has been fueling our business revenue was new people coming in,” the official said. “It was a well-oiled machine. But now the supply chain is broken, and USCIS cannot expect to run its business as normal.”