Congress barrels toward a shutdown with GOP at the wheel

With just 13 days to avert a government shutdown, Speaker Kevin McCarthy is facing his biggest test yet. His challenge: trying to unite fractious House Republicans on a spending agreement, with only a 4-vote margin and seemingly unbridgeable divisions between what right-wing Republicans are demanding and what can ultimately pass the Senate. 

McCarthy allies were working to shore up support Monday for a 30-day stopgap measure. But its future was highly uncertain, as numerous members of his own party had already come out against the deal.

The dominant narrative in Washington is that Speaker McCarthy’s back is against a wall, with conservative Freedom Caucus members threatening – or even pushing for – a shutdown and vowing to try to remove him as speaker if he doesn’t agree to their demands. They see the federal bureaucracy as bloated, ineffective, and driven by a progressive policy agenda. If government grinds to a halt, that’s not a bad thing in their eyes, especially if it forces tough conversations about spending. This fiscal year alone, the government has spent over $1.5 trillion more than it brought in, pushing the debt to a record $33 trillion. 

Mr. McCarthy’s announcement last week of an impeachment inquiry against President Joe Biden, over whether he corruptly participated in his son Hunter’s foreign business dealings, was widely seen as an attempt to placate right-wingers. But they say impeachment is an entirely separate matter.

Lost amid the frenetic jockeying is the fact that this standoff is a political choice. Though it may be the least damaging option for Mr. McCarthy at the moment, there are other courses of action he could pursue. 

When Mr. McCarthy faced a similar crisis last spring over whether to raise the debt ceiling, he wound up brokering a deal with Mr. Biden and Democrats, ultimately getting the measure passed with a huge bipartisan majority. That cost him politically, but not as much as a national default likely would have.

A government shutdown, however, is seen as a lower-stakes event – and maybe even a good thing in the eyes of some Republicans. (Many but far from all federal operations would actually close, until a new funding deal in Congress is reached. No default would occur on national debt.) 

Centrist Democrats see an opportunity for another bipartisan deal between Minority Leader Hakeem Jeffries and Speaker McCarthy, who have had a good working relationship.

“I believe Hakeem Jeffries is ready to do anything within reason and work with members on both sides of the aisle to prevent a shutdown,” says Rep. Dean Phillips of Minnesota, a Democratic member of the bipartisan Problem Solvers Caucus.

He argues that “principled, reasonable Democrats” significantly outnumber the Freedom Caucus members who are blocking a deal and threatening to remove Mr. McCarthy as speaker. “We would be there to protect his seat if he does what’s right not for his party but for the country.”

But Speaker McCarthy, knowing the political cost of such a move, has indicated he’s not willing to explore a bipartisan deal – at least not yet.

And he may not turn to Democrats even in the event of a shutdown, having already experienced the ire of conservatives in the wake of the debt ceiling negotiations, in which they felt he gave up too much ground and went back on promises he had made to them in exchange for their support in January’s speakership election.  

After Mr. McCarthy struck the bipartisan deal to avoid a national default this spring, Freedom Caucus members spearheaded a week-long blockade of bills being brought to the House floor. That standoff ended with an agreement to cut spending by $130 billion more than the debt ceiling deal had outlined. They also pushed a series of votes on hard-right issues that matter to the GOP base. By July, they were talking about a government shutdown.

Even if Mr. McCarthy is able to get his party to pass the current stopgap measure, its anti-“woke” provisions and 8% spending cuts for nearly everything except defense have virtually no chance of making it through the Democrat-controlled Senate.

Many have characterized the high-stakes drama as an embarrassing mess. But Florida Rep. Byron Donalds, a Freedom Caucus member involved in crafting the stopgap measure, says tense negotiations aren’t always a bad thing. 

“It’s actually quite clarifying,” he told reporters last Thursday. 

Representative Donalds, who sits on the Financial Services committee, says one of his hard lines is border security. “Our government should secure its borders. Period, full stop,” he said, as news came last week that the federal government – overwhelmed by the volume of immigrants crossing over the border illegally – was releasing thousands into the streets of southern cities and towns. “That is the job of the federal government. If it doesn’t do that, then why are you funding it?”

It’s not just Freedom Caucus members who are taking a hard line on spending.

Walking back to her office after a vote, Rep. Harriet Hageman of Wyoming says the “vast majority of Republicans feel that there’s far too much power stockpiled in this city and that we spend far too much money.” The federal government, she adds, “should not be the answer to all of our ills.”

The standoff is just the latest evidence that the budget process has become essentially broken in a polarized, narrowly divided Congress. 

The way budget negotiations are supposed to work is that parallel subcommittees in the House and Senate craft 12 appropriations bills to cover all areas of the federal government, from agriculture to transportation. However, it’s been increasingly difficult to get those bills approved by both chambers. 

So Congress has wound up resorting to stopgap measures known as “continuing resolutions,” or “CRs,” that temporarily fund the government at the same level as the previous fiscal year, to give leadership time to hammer out the larger budget deal.

In the current standoff, Freedom Caucus members have opposed any CR that does not adjust spending levels at all, since the previous budget was passed along party lines and reflects a host of Democratic priorities. 

In recent years, Congress has often been unable to finish the regular appropriations process even with a CR, and leadership has combined all 12 bills into one “omnibus,” with members having to vote up or down on the whole package – often with very little time to review what’s in it.

One of the original demands conservative Republicans made of Mr. McCarthy during the speakership battle was to go back to having 12 appropriations bills, to allow more opportunity for input on spending levels in each part of the federal government.

But the only appropriations bill even close to being ready right now is the Defense bill – and last week Mr. McCarthy unexpectedly had to postpone bringing it to a vote because he didn’t have enough GOP support.

Representative Phillips, the centrist Democrat from Minnesota, says he doesn’t envy Speaker McCarthy’s position. Still, he adds, it’s incumbent on leaders to “make appeals to those they know they need. And there are many of us waiting for that appeal – right now. Right now,” he says. “There’s a grand opportunity here.”