House and Senate on a collision course toward a government shutdown (again)

The House and Senate might not be able to agree to terms to fund the federal government by the Sept. 30 deadline, and that's OK to an influential bloc of hard-line House conservatives who are playing an outsize role in both the spending process and the fate of Kevin McCarthy's speakership.

"We should not fear a government shutdown," Rep. Bob Good, R-Va., declared at an event outside the Capitol this week. "Most of the American people won't even miss it if the government is shut down temporarily."

Good is a member of the House Freedom Caucus, and he never voted to elect McCarthy speaker in any of the 15 rounds of voting it took for the California Republican to secure the gavel in January. Good is one of about two dozen lawmakers on the right who intend to use their influence to pressure the speaker to hold the line on spending this fall.

"Our speaker has an opportunity to be a transformational historical speaker that stared down Democrats, that stared down the free spenders, that stared down the president and said, 'No, we're going to do what the American people elected us to do,'" Good said.

The American people also elected divided government, and with Democrats in control of the Senate and the White House, there is no precedent or political reality that would suggest Good's gamble of forcing the Senate and White House to accept the House Republicans' spending bills is possible. It's not even clear yet whether the House can pass their own bills.

As a result, Capitol Hill is bracing for another epic spending clash this fall, but more pragmatic Republicans remain optimistic that another shutdown is avoidable. "It's not an option," Rep. Mario Díaz-Balart, R-Fla., a senior member of the House Appropriations Committee, told NPR. "All that does is take leverage away from Republicans."

Congress can always pass a stopgap funding measure to keep government running until an eventual agreement is reached, but that would almost certainly require McCarthy to enlist the help of Democrats — who largely oppose the GOP-drafted bills — since leading members of the Freedom Caucus, including Good, Rep. Andy Biggs of Arizona and Ralph Norman of South Carolina, have already said they would not support such a stopgap measure.

The art of rewriting the deal

Under pressure from the Freedom Caucus, McCarthy backed away from the deal he cut in late May with President Biden to avoid a debt default and set spending targets for the next two years. Biden signed it into law on June 3.

Central to the deal was a two-year agreement on top-line spending for the 12 annual appropriations bills that would keep nondefense spending flat for fiscal year 2024 and provide only a 1% increase for fiscal year 2025. The impact: a modest $1.5 trillion cut to the federal deficit over the next decade.

Under pressure from conservatives who opposed the deal, McCarthy within days said he would encourage the Appropriations Committee to draft bills below the agreed-upon limits. House Democrats fumed. "If it wasn't so dangerous, it would be laughable," Democratic Caucus Chairman Pete Aguilar told reporters in June, saying then that it increased the likelihood of a shutdown: "I think it very well could."

Conservatives are pushing the House to roll back spending to fiscal year 2022 levels, at a minimum, for everything but the military. If enacted, that plan would require steep across-the-board cuts to essentially all other domestic spending. The House Appropriations Committee, led by Texas GOP Rep. Kay Granger, has been leading bills through contentious committee markups in recent weeks on largely party-line votes. Just one of the 12 spending bills has passed the full House before the August recess, and it was along party lines. The White House has already issued a veto threat on it.

A culture war inside a spending fight

The appropriations dispute is complicated by the fact that for many Republicans both in and out of the House Freedom Caucus, the annual must-pass spending bills are about much more this year than saving taxpayers' money.

Indiana Rep. Jim Banks, who is running for Senate, chairs a new "Anti-Woke" Caucus made up of about two dozen Republicans who have lobbied appropriators to include additional policy riders to eliminate, prohibit or defund social programs or priorities that they say promote a "far-left ideology" on race and gender with the federal government.

The group sent letters back in April to leaders of all 12 subcommittee chairs outlining programs they opposed. For example, they called for eliminating $3 million for the House Office of Diversity and Inclusion in the spending bill that funds Congress. The committee eliminated the funding in late June.

The culture war divisions have also sparked contentious moments in committee. Last week during a markup of the spending bill for the departments of Transportation and Housing and Urban Development, Republicans successfully stripped funding for three LGBTQ+ centers located in three separate Democrats' districts.

The move prompted the top Democrat on the panel, Rosa DeLauro of Connecticut, to say Republicans "crossed a red line" by targeting member-requested projects that were otherwise approved and eligible under new guidelines for members to seek earmarks. Another Democratic member of the committee, Rep. Mark Pocan of Wisconsin, who is gay, accused the majority of anti-gay bigotry. "If you were to take away earmarks because they went to the NAACP or the Urban League, you would rightfully be called racist bigots, but when you do it to the LGBT community, it's another frickin' day in Congress," he said.

Republicans are also trying to tighten abortion restrictions with new policy language in bills including the House-passed spending bill for military construction and veterans that would block a Biden-era rule aimed at expanding abortion access and allows abortion counseling for those seeking care through the Department of Veterans Affairs. The GOP provision was cited by the Biden administration in its veto threat.

Senate takes a different approach

In sharp contrast, the Senate has been moving through its versions of the annual spending bills with the top Democrat and Republican on the committee working in lockstep.

"We are determined to continue working together in a bipartisan manner to craft serious funding bills that can be signed into law," Appropriations Chairwoman Patty Murray, D-Wash., and ranking member Susan Collins, R-Maine, said in a joint statement last month. "Keeping the Senate appropriations process moving full steam ahead and in a bipartisan way is critical."

The first two women to jointly lead the panel have made good on that pledge, moving through committee all 12 of their bills before the August break with near unanimous support at the levels agreed to in the McCarthy-Biden budget deal and with none of the culture war-driven riders added by the House.

In a move likely to further stoke House GOP anger, Murray and Collins last week announced a bipartisan agreement to add on an additional $13 billion in spending — $8 billion for defense and $5.7 billion for non-defense priorities — to be spread across four spending bills.

In addition to White House opposition, any new policies to restrict abortion access will be particularly hard to negotiate with Murray, who has made protecting abortion rights a central pillar of her political campaigns and policy advocacy in Congress.

For now, House GOP leaders insist this is all part of a healthy legislative process, with the goal of having House and Senate appropriators negotiate in conference committees each of the 12 bills individually for final approval before the end of the year.

McCarthy earlier this week reiterated his pledge to return the House to regular order and oppose any "omnibus" spending bills that bundle legislation together and are jammed through Congress, a common practice in recent years. "I said no longer will we have these omnibuses where people write bills in the back of the room and no one gets to see it," he told reporters. House Majority Leader Steve Scalise, R-La., said the House and Senate could start negotiating the terms of their bills over the August recess.

The fate of a speakership

Spending disputes, government shutdowns and fights over policy riders on cultural issues are nothing new.

"It certainly has been this bad before," said Charles Kieffer, who retired earlier this year after four decades working on budget and spending policy, most recently as the top Democratic staffer on the Senate Appropriations Committee for more than two decades. "I think what's different about this year is that it's so clear that Speaker McCarthy doesn't know what his portfolio is from his Caucus about what he can do."

In other words: No one really knows what McCarthy will agree to since he walked about from the deal, or what he can bring to the House floor that can become law that doesn't risk costing him the speaker's gavel, especially if it has to pass on the strength of Democratic votes — exactly as the budget deal he cut with Biden did.

The same hard-line conservatives who made McCarthy fight for the gavel back in January have not ruled out invoking House Rules that make it easier to oust the speaker in the middle of a Congress if things don't go their way this fall. His critics are speaking in ominous tones about the negotiations. "We're sounding the warning call," said Biggs. "We're reminding our leadership: you need the votes. And we're begging our leadership: Listen to us."

What's also missing this year, Kieffer said, is a quiet understanding among top appropriators and party leaders that despite public fighting, there is always a path to deal if people work in good faith. "This year we don't know that there's a path," he said. "Anybody who tells you they know how this appropriations process plays out shouldn't be trusted. There's just too many variables."

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