Budget negotiations approach a stalemate on Capitol Hill
On Oct. 1, the country may wake up to news of a government shutdown—the 22nd in American history.
“That’s when the federal government has not passed the appropriate spending measures for the upcoming fiscal year and so it can’t fund the workings of the government,” Jared Pincin, associate professor of economics at Cedarville University, said.
If that happens, many services deemed essential, like Social Security and Medicare, will stay put. But national parks, parts of the military, Congress, and some government contractors will close down or be left without a paycheck. The fallout isn’t likely to hurt the economy, but it is certain to tear the stitching on the GOP’s unity.
On Thursday morning, the House tested that unity as it voted 216-212 against a short-term funding package presented by House Speaker Kevin McCarthy, R-Calif. Several members of the right-leaning Freedom Caucus voted not to open debate on the bill. The most conservative flank of the House GOP wants to see progress toward shrinking the nation’s overall spending.
The Freedom Caucus supported McCarthy’s speakership at the outset of 2023 in return for some assurances—among them, that he would steer clear of omnibus spending packages, bring back the practice of passing individual appropriations bills for government agencies, and give individual lawmakers more of a role in crafting those bills. In their view, McCarthy’s in danger of breaking that promise.
The speaker hasn’t proposed a full omnibus spending package, which would consolidate the nation’s federal spending into one massive bill, usually thousands of pages long. Instead, he proposed a short-term spending package called a continuing resolution. It included three of the 12 traditional appropriations bills and focused on defense appropriations while extending the deadline for approving a government budget.
Freedom Caucus member Rep. Matt Gaetz, R-Fla., said Republicans should strip McCarthy of his speakership for even suggesting the plan.
“You are out of compliance with the agreement that allowed you to assume this role.” Gaetz said in a House floor speech last week. “The only thing the 118th Congress is known for at this point is electing Kevin McCarthy as speaker and underwriting Biden’s debt. Unfortunately, there’s only one of those that we can remediate at this time.”
The Freedom Caucus said it won’t consider McCarthy’s spending proposal unless he can promise additional construction on the southern border wall, commit to using House procedural authority to rein in the FBI, and pledge to back away from “blank check” spending in support of Ukraine. Because of the thin GOP majority in the House, McCarthy needs the votes of all but four Republicans to pass a bill without any Democratic support.
But any bill that clears the House would also somehow have to survive a vote in the Democrat-controlled Senate and make it across President Joe Biden’s desk. Pincin said the political impasse and short timeframe makes the situation a powerful political messaging weapon.
“Congress thrives on emergencies. ‘We must pass this or here are these consequences,’” Pincin said. “Whereas in June or July or some other month where they could be doing appropriations work, there’s no urgency in the situation.”
Past shutdowns have had minimal effect on the economy. According to the Congressional Budget Office, the country’s gross domestic product suffered a $18 billion lag in 2019 when the government shut down for a month over funding disagreements for Trump’s border wall. But when federal spending kicked back in and the majority of government workers received back pay, the bulk of that hole was quickly filled.
“National parks are often shut down, even though, as a percentage of the budget, it’s minimal—it’s rounding errors. That’s called the ‘Washington Monument Strategy,’” Pincin said. “If I were someone who had just started paying attention, [I would ask] what are they talking about shutting down? And is that leading to a solution or trying to make a political point?”
Despite the pressure, McCarthy keeps trying to find common ground. He has said he’s not going to back down.
“I’ve told all of Congress you’re not going to go home. We’re going to continue to work through this,” McCarthy told audiences at the Capitol on Monday. “Things that are tough sometimes are worth it.”
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