Right-Wing Rebels Hand McCarthy a Stunning Defeat

Plus: Healthcare costs expected to jump ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey House Republican leaders sent their members home for the week Thursday after suffering another stinging defeat in the ongoing intraparty fight over spending bills. Here’s what’s happening. This was a bad week for McCarthy. (Graeme Sloan/Sipa USA) GOP Hardliners Deliver Another Stunning Blow to Kevin McCarthy The House Republican chaos caucus dealt another stunning blow to Speaker Kevin McCarthy on Thursday, defeating their own party’s Pentagon funding bill for the second time in a week. The failed vote, combined with indications that several ultraconservatives remain opposed to a stopgap spending bill, leaves House Republicans in a continued state of turmoil and casts further doubt on whether Congress will be able to avert a partial government shutdown at the end of the month. Thursday’s surprising 212-216 procedural vote came after House Republicans had appeared to make some progress during a lengthy Wednesday evening meeting, setting a path forward on both the defense bill and a modified stopgap spending measure, with GOP leaders apparently confident that they had flipped enough opponents to advance the Pentagon bill. McCarthy had reportedly embraced a plan to offer a one-month stopgap spending bill funding the government at an annual level of $1.47 trillion in discretionary spending, the same amount House Republicans had passed this spring, before a deal with the White House established a $1.59 trillion cap on such spending. The McCarthy strategy also would have attached GOP immigration legislation to the short-term funding and called for the creation of a fiscal commission to address the national debt. The plan would have excluded money for Ukraine and disaster relief. McCarthy’s plan also involved bringing up the defense bill again and moving on a series of fiscal year 2024 appropriations bills that, all told, set discretionary spending at $1.52 trillion — again, below the caps he had agreed to earlier this year, meaning that the Senate and White House would have rejected it. That all fell apart on Thursday. Instead, with just nine days to go before the shutdown deadline, six hardliners in McCarthy’s conference voted against advancing the GOP defense appropriations bill — legislation that typically advances with little drama. And it became evident that the new stopgap spending bill also faced [more than enough]( opposition to kill it because some hardliners remain upset that House leaders have failed to pass a budget resolution and move the 12 annual spending bills in The six Republicans who joined Democrats in voting against the rule governing debate on the defense bill were Reps. Dan Bishop of North Carolina, Andy Biggs of Arizona, Tom Cole of Oklahoma, Eli Crane of Arizona, Marjorie Taylor Greene of Georgia and Matt Rosendale of Montana. Cole, the Rules Committee chair, flipped his vote to “no” so that he could then call for reconsidering the vote later. Greene and Crane had voted yes on the rule on Tuesday but switched to “no” today. Greene said she opposes the $300 million in Ukraine aid included in the bill. The changes surprised McCarthy, who admitted to being frustrated. “This is a whole new concept of individuals that just want to burn the whole place down,” the speaker said. “That doesn't work.” Neither does the House right now. McCarthy reportedly plans to start bringing up individual annual appropriations bills next week, but those bills would go nowhere in the Senate and there’s little indication that the House will be able to pass a stopgap measure to keep the government running. So instead of staying in session as previously planned for votes on spending bills Friday and Saturday, House Republican leaders sent members home until Tuesday because they simply don’t have the votes to get anything done. The bottom line: Some frustrated Republican moderates may be open to working with Democrats on a short-term spending bill and some in the party reportedly see a stopgap proposal from the bipartisan Problem Solvers Caucus as the best option. Still, a shutdown appears highly likely at this point. Trump May Complicate Efforts to Avoid a Shutdown Congressional efforts to avoid a government shutdown after September 30 were complicated by former president Donald Trump, who on Wednesday evening called on Republicans to “defund all aspects” of what he claims is a “weaponized” Biden administration. In a post on social media, Trump said this is the “last chance to defund these political prosecutions against me and other Patriots.” Piggybacking on the Trump statement, Republican Rep. Matt Gaetz, a Trump ally and vehement critic of House Speaker Kevin McCarthy, posted: “Trump Opposes the Continuing Resolution. Hold the line.” Separately, he [told reporters]( “It was definitely a shot in the arm to our ‘no CR’ movement to have the president join us.” President Joe Biden’s re-election campaign blasted Trump Thursday. “Donald Trump is rooting for a government shutdown and couldn't care less what it would mean for American families,” TJ Ducklo, a campaign advisor, said in a statement. “The former president continues to act as MAGA House Republicans' puppetmaster, now ordering them to shut down the government, which would cause chaos at the expense of hardworking Americans and our nation's security.” Trump presided over the longest government shutdown in U.S. history, which dragged on for 35 days in 2018 and 2019, as Trump demanded money for his border wall. The shutdown ended after Trump caved despite not winning any concessions. White House Authorizes $600 Million for New Covid Tests Amid a surge of new Covid-19 cases around the U.S. in recent weeks, the Biden administration is spending $600 million to produce another round of at-home tests, which will be available for free through the mail starting on September 25. Households can order as many as four tests each using the website (COVIDTests.gov) that was first deployed in January 2022. The federal funds will support the production of roughly 200 million new tests, made by 12 manufacturers around the country. “Manufacturing COVID-19 tests in the United States strengthens our preparedness for the upcoming fall and winter seasons, reduces our reliance on other countries, and provides good jobs to hardworking Americans,” Dawn O’Connell, Health and Human Services assistant secretary for preparedness and response, said in a [statement](. Shipments are scheduled to begin on October 2 through the U.S. Postal Service. A government shutdown, should it occur, will not affect the program’s ability to fulfill orders. Chart of the Day Healthcare costs for employers are expected to see their biggest increase in more than a decade in 2024, Reuters [reports](. Leading benefits consultants say the increase will be in the range of 5.4% to 8.5%, driven by inflation and increased demand for weight-loss drugs, among other things. Employees won’t see much of the price hike, though, as the majority of employers polled on the issue said they expect to cover the higher costs on their own. --------------------------------------------------------------- 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 - [House GOP Leaders Sending Members Home for the Week as Shutdown Appears Increasingly Likely]( – CNN - [House GOP Again Fails to Advance Pentagon Funding, Deepening Spending Crisis]( – Axios - [The Week McCarthy Threw It All at the Wall — and Nothing Stuck]( – Politico - [White House Watches House GOP Dysfunction as Government Shutdown Nears]( – Washington Post - [House Democrats Weigh Risky Strategy: Whether to Save McCarthy]( – CNN - [Senate GOP Predicts McCarthy Will Go to Democrats for Votes]( – The Hill - [McCarthy Wouldn’t Let Zelensky Deliver Joint Address to Congress on D.C. Visit]( – Axios - [Trump Lobs New Grenade Into GOP's Government Shutdown Debate]( – Axios - [Pentagon Exempts Ukraine Operations From Potential Government Shutdown]( – Politico - [US Employers to See Biggest Healthcare Cost Jump in a Decade in 2024]( – Reuters - [Treasury Buyback Plan Will Boost Market Resilience, US Debt Official Says]( – Bloomberg - [Half a Million People, Including Kids, Mistakenly Dropped From Medicaid]( – Politico Views and Analysis - [Shutdowns Don’t Work, But Republicans Seem Determined to Force One Anyway]( – Joshua Green, Bloomberg - [Shutdown Is Nigh as Trump Tells Republicans to Defund the Government]( – Ed Kilgore, New York - [Tyranny of Extreme Minority: House Traditions Allow Just a Handful to Dictate Agenda]( – Paul Kane, Washington Post - [What Happens During a Government Shutdown?]( – Bobby Kogan, Center for American Progress - [Biden Has the Right Idea About the Freedom Caucus]( – Ryan Cooper, American Prospect - [How Budget Commissions Can Make Deficit Reduction Harder]( – Howard Gleckman, Tax Policy Center - [Ukraine Aid Is Hanging by a Thread]( – Josh Rogin, Washington Post - [Zelensky Confronts an Increasingly Skeptical Republican Party]( – Theodoric Meyer, Tobi Raji and Leigh Ann Caldwell, Washington Post - [Fed Officials See Way Out of Inflation Woes Without Major Economic Pain]( – Neil Irwin, Axios - [The Fed’s Dream of a Soft Landing Is Facing a Triple Threat]( – Edna Curran, Bloomberg - [Higher Interest Rates Not Just for Longer, but Maybe Forever]( – Greg Ip, Wall Street Journal - [Will Republicans Abandon This Medical Triumph?]( – Nicholas Kristof, New York Times - [“Bideonomics” as Politics and Policy: Creditable Start, but Gaps to Fill]( – Ed Gresser, Progressive Policy Institute Copyright © 2023 The Fiscal Times, All rights reserved. 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