A $120 billion disagreement over federal spending threatens to send Washington hurtling toward a government shutdown later this year, even as lawmakers race to pass their annual appropriations bills.
For a moment, it seemed as though Congress might avoid the kind of last-minute stalemates that have come to define the appropriations process. Lawmakers had pledged to move the 12 annual bills individually after years of catchall packages that often included extraneous measures and what critics consider bloated federal spending.
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More importantly, Speaker Kevin McCarthy (R-CA), leveraging a June deadline to raise the nation’s borrowing limit, struck a deal with President Joe Biden that effectively keeps the current level of nondefense spending in place. The compromise allowed House Republicans, holding a narrow majority, to argue they had curbed federal spending, while the Biden administration and Democrats, in control of the Senate, could claim they curbed larger GOP-sought cuts.
Yet no sooner had the country avoided default, raising the nation’s debt ceiling to allow for more borrowing, than lawmakers faced a new showdown.
A small group of conservatives staged a revolt over McCarthy’s compromise with the White House, grinding business on the House floor to a halt. The speaker, as a promise he made to win the gavel in January, pressed Biden to roll back spending to 2022 levels but walked away with far more modest cuts.
Members of the Freedom Caucus, who hold outsize influence in the House given Republicans’ five-seat majority, were left fuming. Caucus members and allied House conservatives even entertained the idea of holding a “no confidence” vote on McCarthy’s speakership.
They relented from their blockade, however, after McCarthy agreed to draft spending bills at 2022 levels. The top lines he and Biden agreed to would be a ceiling, not a floor, said Appropriations Chairwoman Kay Granger (R-TX) three days later as the House nailed down spending levels for each of the 12 bills it will pass in the coming months.
Yet it quickly became apparent that McCarthy had traded one headache for another. Democrats accused him of “reneging” on his deal with Biden, while centrist Republicans grumbled more loudly than ever about his acquiescence to members of the Freedom Caucus.
“Do you think any of us would have made a deal if we thought your number was the deal? What kind of deal is that? What kind of respect for yourselves is that?” Rep. Steny Hoyer (D-MD), a senior Democrat on the House Appropriations Committee, chided Republicans earlier this month.
The Senate is enduring far less drama as it crafts its own appropriations bills ahead of a Sept. 30 deadline to fund the federal government. In fact, Senate Appropriations Chairwoman Patty Murray (D-WA) and the panel’s top Republican, Sen. Susan Collins (R-ME), have pledged to work on a bipartisan basis.
Yet they know any respite in legislative drama over spending will be brief. They have committed to crafting their spending bills at the levels established in the debt ceiling deal, setting Congress up for a House versus Senate clash.
The two chambers have agreed to spare defense, veterans care, and homeland security from budget cuts, but conservatives want to slash the rest of the discretionary budget. Granger doled out top lines that cut some appropriations bills by more than a third relative to 2023 levels.
The result: a yawning, $119 billion gap between the House and Senate budget plans.
Deep reductions are a nonstarter for Democrats, who control the White House and Senate. Even some centrist Republicans in the House will be reluctant to go along with McCarthy’s plan.
Lawmakers, perhaps with the exception of the Freedom Caucus, fundamentally understand that to avert a shutdown starting Oct. 1, it will take another bipartisan compromise such as that seen in the debt ceiling fight.
“You cannot pass appropriations bills without them being both bipartisan and bicameral. The president will not sign,” Rep. Rosa DeLauro (D-CT), the top Democrat on the House Appropriations Committee, told reporters earlier this month.
“So, I think this notion that you can deal with 2022 levels, that appears to have been a part of this secret deal, you then may be looking at guaranteeing a shutdown,” added DeLauro, who led the Appropriations Committee from 2021-23.
Yet some House conservatives are already shrugging at the prospect of a shutdown. Rep. Byron Donalds (R-FL) said this month he’s happy to shutter Washington for weeks if it means reining in federal spending.
For now, Senate appropriators are keeping their heads down. On June 21, they gave each of the 12 Appropriations subcommittees their spending allocation levels for the coming fiscal year. The full Appropriations Committee also amended and rewrote, or “marked up,” two of the dozen federal spending bills, for military construction and agriculture.
“I’m focused on getting our job done right now,” Murray told the Washington Examiner.
The push is notable — the full Senate has not passed an individual appropriations bill since 2019. Murray and Collins’s predecessors, who retired at the end of the last Congress, preferred to cut behemoth spending bills outside of the committee process.
Collins told the Washington Examiner she hopes the return to some semblance of normalcy will ease tensions for conservatives, who seethed at what they viewed as years of backroom deals that excluded input from the rank and file.
She plans to have the “vast majority” of bills reported out of committee before the August recess.
The House Appropriations Committee has already approved funding for agencies such as the Department of Homeland Security and the Department of Veterans Affairs.
But the entire process has appropriators irked since the cuts are too severe for Democrats to stomach. To compensate, Granger is eyeing billions in funds Congress previously allocated but never spent, despite warnings from conservatives that the clawbacks are no substitute for lower discretionary spending.
Rep. Pete Aguilar (D-CA), a member of Appropriations and the No. 3 Democrat in the House, worried aloud that the House would end up short-changed in the process.
“We are completely ceding the appropriations process to the Senate at this point,” Aguilar told reporters this month. “The Senate is the only entity that is marking up to the agreed-upon numbers.”
He predicted the House would eventually wind up voting on whatever the Senate produces.
That vote may not come in the fall. If history is any guide, lawmakers will extend government funding to late December, teeing up a now-familiar scramble to avert a shutdown before the Christmas recess.
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The stakes are not nearly so high as in the debt ceiling fight. There’s mostly a political cost, usually shouldered by Republicans, to pay when the government shuts down.
But Congress is incentivized to reach a deal by a provision in the debt ceiling compromise that forces a 1%, across-the-board cut if lawmakers fail to act by the end of the year.
