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Situational awareness: The WSJ is reporting that Trump lawyer Michael Cohen arranged a payment to former adult film star Stephanie Clifford in 2016 to remain silent about an alleged sexual encounter with President Trump in 2006.

1 big thing: A week from shutdown, no deal in sight

The government is seven days away from shutting down over an impasse on immigration. This week of talks with the White House and Congress made have only made things worse, Axios' Jonathan Swan, Caitlin Owens and Alexi McCammond report.

What one senior GOP aide told us today:

"Everybody hates each other right now."

Between the lines: This will not be solved by the so-called "Gang of Six" group of senators looking for a big immigration deal — what they're pursuing is miles away from what President Trump or the GOP House will agree to. In fact Republican leaders don't even see the Jan. 19 spending deadline as a deadline for Dreamers at all.

  • Some Republicans think Democrats can be forced to vote for a stop-gap spending bill by adding the children's health care extension to it, but Dems are going to be under intense pressure from their base not to fold on immigration.
  • In the meantime, each side is already blaming a possible shutdown on the other and Trump's "shithole" comments gave Democrats even more reason not to cave.

But, but, but... It's worth noting that this kind of brinkmanship is fairly typical until practically the day before a government shutdown. If by next Wednesday or Thursday there's still no agreement, a bunch of angry members of Congress will have to decide whether whatever they're angry about is worth closing the government over.

2. What you missed

Donald Trump receives applause after signing a proclamation to honor Martin Luther King, Jr. Day. Photo: Mark Wilson / Getty Images

  1. President Trump denied saying "shithole" in references to the home countries of immigrants from El Salvador, Haiti an African nations. Sen. Dick Durbin says Trump used the word. The entire saga, in bullets.
  2. The Trump administration will continue waiving sanctions as they relate to the 2015 Iran nuclear deal. Details.
  3. Facebook shares plunged 5% this morning after Mark Zuckerberg announced changes to his platform's newsfeed that will prioritize engagement over time spent. Chart.
  4. The Russian hacking group that targeted the DNC in 2016 is planning another cyber attack, this time against the Senate, per the AP.
  5. The Trump administration has signed off on the first-ever set of work requirements for Medicaid beneficiaries. First up: Kentucky.
3. 1 fun thing: Inside an American pencil factory

"Since 1889, the General Pencil Company has been converting huge quantities of raw materials (wax, paint, cedar planks, graphite) into products you can find, neatly boxed and labeled, in art and office-supply stores across the nation: watercolor pencils, editing pencils, sticks of charcoal, pastel chalks," Sam Anderson writes for the N.Y. Times:

  • "Even as other factories have chased higher profit margins overseas, General Pencil has stayed put, cranking out thousands upon thousands of writing instruments in the middle of Jersey City."
  • "Over the past few years, the photographer Christopher Payne visited the factory dozens of times, documenting every phase of the manufacturing process."

Photo essay worth your click.