The Democrats will reject it, because this way Trump gets the wall, and the wall must not be built lest he win in 2020. Besides, to Democrats, "compromise" is defined as "the Republicans bending over and letting us do what we want."
Thing is? If the Democrats don't accept a perfectly reasonable compromise such as the one Trump is offering--if their so-called "negotiation" amounts to "give us what we want and accept getting nothing you want, or go pound sand"--then it makes them into the bad guys, here. And that gives Trump the go-ahead to take the gloves off.
Hmm--need popcorn....