DHS confirmed the policy was considered
Do you think they created an 11 page memo for fun?
The WaPo notes the strength of the denial:
We now know the draft did exist -- in some form. The Department of Homeland Security denies it was written by Secretary John Kelly, as it appears in the memo and as AP reported. (It stands to reason that it was prepared as if Kelly had written it, when in fact he hadn't.) But DHS also tells The Post that the draft memo is real, despite being a "very early, pre-decisional draft that never made it to the secretary."
In other words, the White House seems to quibble with the idea that this is a proposal actively under consideration, but the memo is legit. Spicer's contention that this was "100 percent not true" doesn't really hold up.
At the same time, the White House doth protest a little too much here. Spicer seemed genuinely peeved that this was being reported, but it's not actually that outlandish an idea next to Trump's rhetoric on this issue. In fact, it sure sounds like what Trump talked about early in his campaign and as recently as November.