McCarthy Faces Grim Math on New Plan to Avert Shutdown

Plus: The national debt tops $33 trillion ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey Happy Monday! House Republicans have proposed a new plan to avert a shutdown at the end of the month — only it faces GOP opposition and wouldn’t avert a shutdown even if they passed it. And the national debt hits a new milestone. Read on for details. McCarthy must graple with conservative oppositon to a short-term spending deal. (Reuters) House GOP Plan to Avert a Shutdown Wouldn’t Avert a Shutdown With less than two weeks to go until the September 30 deadline to avert a partial government shutdown, two key House Republican groups have put forth a proposal to temporarily keep federal agencies running — but their proposal has met with some opposition from their own party and would have no chance of getting through the Senate, meaning that the plan represents little in the way of real progress. The proposed bill, crafted by six leading members of the Main Street Caucus and the House Freedom Caucus, would reportedly fund the government through October 31, though it would reduce discretionary spending by 1% on average, with the Defense Department and the Department of Veterans Affairs exempted from any cuts while other agencies would see their budgets slashed by 8% for the duration of the extension. The continuing resolution (CR) would also include the bulk of a House GOP border security bill, and the agreement reportedly also calls for the Defense appropriations bill for fiscal year 2024 to be passed along with the stopgap funding. However, the package does not include the additional disaster relief funds or support for Ukraine that the White House has requested. "HFC Members have worked over the weekend with the Main Street Caucus on a path forward to fund the government and secure America’s border," House Freedom Caucus Chair Scott Perry of Pennsylvania said in a statement. "We now have a framework for our colleagues across the House Republican Conference." But while House Republican leaders reportedly plan to bring the Defense appropriations bill to a floor vote on Wednesday followed by a vote on the funding stopgap on Thursday, GOP lawmakers quickly began lining up against the plan. With Republicans holding a slim majority and Democrats also [opposed]( to the plan, House Speaker Kevin McCarthy can’t afford to lose more than four of his own members — and [more than that]( have already expressed opposition, in some cases [quite harshly](. "If this bill gets a vote and moderates accept it, they are likely to face the possibility of campaign ads highlighting that they voted for deep cuts to programs such as education, food safety and environmental protection," The Washington Post [notes](. A face-off with the far right? McCarthy on Sunday told Fox News that he would hold a vote this week on the Defense appropriations bill even if it doesn’t have enough support to pass. That will ramp up pressure on the far-right members who previously blocked the bill as part of their standoff over federal spending levels and other policy demands. McCarthy also argued against a shutdown. "I’ve been through shutdowns, and I’ve never seen somebody win a shutdown. ’Cause when you shut down, you give all your power to the administration," he said. "How are you going to win your arguments to secure the border if the border agents don’t get paid?" Those arguments may do little to win over conservative hardliners. As the spending fight drags on, though, the tensions between McCarthy and far-right members of his own party — including those threatening to try to oust him via a procedural step known as a motion to vacate — may have to come to a head. "Since becoming speaker, McCarthy has worked repeatedly to appease the conservatives most likely to support a motion to vacate, instead of with a governing bipartisan majority. McCarthy’s approach is different from the previous two Republican speakers, who didn’t work so hard to accommodate the far right and were nudged out of their jobs," the Post’s Leigh Ann Caldwell and Theodoric Meyer write. "The approach has brought Washington to the brink of a government shutdown and put Republicans in swing districts — whose victories last year delivered McCarthy his slim majority — in tough positions." For now, though, McCarthy and House Republicans will be trying to show a united front, demonstrate that they did something to avoid a shutdown and win some leverage with the Senate. It’s mostly messaging, though. "The interesting thing about this week," Jake Sherman of Punchbowl News wrote on the site formerly known as Twitter, "is the House GOP leadership is well aware that the CR they rolled out this weekend will not pass. But they’ll spend all week trying to get it through and at the end of the week, they’re likely to be no closer to averting a shutdown." The bottom line: There’s no clear path to avoiding a shutdown, and McCarthy’s job is still very much on the line. And this short-term funding patch may be the easy part: Congress still has to fund the government for the full fiscal year ahead. U.S. National Debt Tops $33 Trillion The national debt hit a new milestone Monday, topping $33 trillion for the first time, according to data published by the Treasury Department. The record amount reflects the size of the gross national debt, which includes all financial liabilities of the federal government. A separate measure of debt held by the public, which excludes debt the government owes itself, stands at roughly $26 trillion. The number highlights just how rapidly the debt is growing. In June, lawmakers battled over raising the debt limit, which then stood at $31.4 trillion. The debt quickly jumped to $32 trillion, then to $33 trillion in just a few months. According to some projections, the debt is on track to top $50 trillion by the end of the decade. Speaking on CNBC Monday, Treasury Secretary Janet Yellen said that while interest costs on the existing debt remain manageable, policymakers should take steps to modify the current path. "The president has proposed a series of measures that would reduce our deficits over time while investing in the economy," she said, "and this is something we need to do going forward." Chart of the Day: Student Loan Payments Ramp Up Americans are starting to make payments on their student loans again ahead of an October 1 deadline following a three-and-a-half-year hiatus due to the Covid-19 pandemic, and the surge of cash is noticeable in the daily deposits at the Department of Education. While not all the deposits at the agency are related to student loans, there is a clear jump coinciding with the renewal of the repayment program this month, totaling $4.5 billion so far. "Borrowers aren’t required to make their first monthly payment until some point in October, depending on their individual due date," [says]( Politico’s Michael Stratford, who highlighted the big jump Monday. "But at least some number of borrowers appear to be getting a jump on those payments — or at least trying to avoid interest accrual, which began at the beginning of September." $80 Million Stealth Fighter Goes Missing Can a warplane be too stealthy? A Marine Corps pilot ejected from his F-35B stealth jet somewhere over South Carolina on Sunday, and military officials say they now can’t find the aircraft, which may have continued to fly on autopilot for some time after the ejection. The F-35B — the Short Take-Off and Vertical Landing (STOVL) version of the jet, one of three variants of the F-35 Lightning II Joint Strike Fighter currently produced by Lockheed Martin — currently costs something like $80 million per unit, though critics will tell you the true price is considerably higher once you include the costs of development and upgrades. Overall, the F-35 program is on track to be the most expensive weapons system in military history, with a total price tag of $1.7 trillion over its lifetime, according to the latest [estimate]( by the General Accountability Office. If you happen to come across an unmanned F-35B, either in the air, on the ground or in a lake, please call Joint Base Charleston at 843-963-3600. --------------------------------------------------------------- Send your feedback to yrosenberg@thefiscaltimes.com. And please encourage your friends to [sign up here]( for their own copy of this newsletter. --------------------------------------------------------------- Fiscal News Roundup - [McCarthy’s Plan to Avoid a Shutdown Hits Stiff G.O.P. Opposition]( – New York Times - [House GOP Deal to Avert Shutdown Gets Icy Reception From Conservatives]( – The Hill - [McCarthy Will Move Ahead on GOP Stopgap Bill, Despite Conservative Opposition]( – Politico - [Here’s What’s in Republicans’ Proposed Deal to Prevent a Shutdown]( – The Hill - [Heritage to Back CR Deal]( – Politico - [Democrats Move to Suspend Senate Rules to Advance Stalled Spending Bill]( – The Hill - [In U.S., Zelensky Will Make Case for More Aid, and Offer Thanks]( – New York Times - [‘Report Card’ Grading House Republicans on Ukraine Aid Shows Stark Split]( – Washington Post - [Schumer: ‘Cannot Think of Worse Welcome’ for Zelensky Than House Stopgap Proposal]( – The Hill - [Billions Pour Into Education Department as Student Loans Restart]( – Politico - [How One Company Profited While Delaying Narcan’s Drugstore Debut]( – Washington Post - [Obesity as a Factor in Cardiac Deaths Tripled Over 20 Years]( – Washington Post - [The Marines Somehow Lost a Whole F-35]( – New York Views and Analysis - [A Good Deal Already Exists to Avert a U.S. Government Shutdown]( – Washington Post Editorial Board - [Could McCarthy Really Lose His Job?]( – Leigh Ann Caldwell and Theodoric Meyer, Washington Post - [It’s McCarthy’s Mess. 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