What’s Next in the Shutdown Showdown

Plus: A plan to end shutdowns for good? ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey Happy Friday! Here’s what’s happening with just eight days to go before the government may have to shut down. McCarthy still hopes to pass some spending bills next week. (Reuters) McCarthy’s Mess: Eight Days and Counting Until a Possible Government Shutdown What a waste. With a looming September 30 deadline to prevent a government shutdown, the House has now squandered two weeks because of Republican infighting. Since House lawmakers returned last week from a 47-day August recess, McCarthy has tried various tactics to corral his most quarrelsome members and unite his conference behind a stopgap measure to prevent a shutdown and keep Republican rebels from seeking his ouster. To appease the far-right wing of his party, he announced an impeachment inquiry into President Joe Biden, bypassing a full vote on the House floor. He dared the rebels to try to pry away his speaker’s gavel, dropping some f-bombs as he did it. He then essentially capitulated to the conservatives’ demands on federal spending levels, trying to find a deal that could be approved by his narrow majority. None of it worked. None of it quelled the mutiny in McCarthy’s ranks or made any real progress toward averting a shutdown, as hardline Republicans continue to block a short-term extension of federal funding and the speaker continues to focus on his right flank rather than entertain the possibility of a bipartisan agreement. McCarthy had hoped to pass a Republican stopgap bill this week, laying down a marker for negotiations that could wring some concessions from Senate Democrats. Instead, he may have to decide what to do with a bill that the Senate sends over. What’s next: The House is now set to take up individual spending bills when it returns on Tuesday, starting with four of the 11 appropriations bills that still must be passed: those covering Homeland Security, the State Department and foreign operations, the Defense Department and Agriculture. McCarthy said that he plans to strip out some $300 million for Ukraine from the Defense spending bill and hold a separate vote on that aid in hopes that will help Pentagon funding pass after two failed procedural votes. It will be challenging for House Republicans to speed through the outstanding appropriations bills in the final days before the September 30 deadline —and almost entirely pointless. Even if they can pass those spending bills at levels in line with what GOP conservatives are demanding, it would not address the immediate task at hand: preventing a shutdown. McCarthy said Friday that he still aims to pass a partisan short-term funding bill next week. “I still believe if you shut down, you’re in a weaker position,” McCarthy [told reporters](. “You need the time to fund the government while you pass all the appropriations.” But he reportedly skirted around a question about whether passing the four GOP appropriations bills will build support among his holdouts for a Republican stopgap spending bill. The Senate prepares to move first: The Senate, meanwhile, is preparing to push ahead with its own bipartisan spending bill, which is expected to also include Ukraine aid funding that House conservatives oppose. Senate Majority Leader Chuck Schumer has laid the legislative groundwork to enable his chamber to pass a spending patch that can be sent to the House. “Hopefully the House will see that working in a bipartisan way is best for the American people and best for Speaker McCarthy. He can’t let this small group of hard-right people, who are almost fanatics, who want the government to shut down despite the harm it does to the American people, to govern the whole body,” Schumer [told CNN](. Schumer added that he’s working with Senate Minority Leader Mitch McConnell on the details of a continuing resolution. “Leader McConnell and I are talking and we have a great deal of agreement on many parts of this,” Schumer said. “It’s never easy to get a big bill, a CR bill done, but I am very, very optimistic that McConnell and I can find a way and get a large number of votes both Democratic and Republican in the Senate.” Still, the Senate process could eat up most or all of the time remaining before the Saturday deadline, especially since Republican Sen. Rand Paul has already said he would oppose speedy passage of a bill that provides more money for Ukraine. The bottom line: McCarthy at some point is likely to again face a choice: Pass a short-term spending bill with help from Democrats, which would prevent or end a shutdown but also put his job at risk, or continue trying to placate conservatives and allow federal agencies to go dark. McCarthy’s actions thus far provide little indication that he would buck his hardliners. Lawmakers Eye Plan to End Shutdowns Permanently The looming threat of yet another government shutdown — which would be the 21st since 1977 — has sparked renewed interest in proposed legislation that would bring such disruptions to an end. On Friday, Politico’s Burgess Everett [reports]( lawmakers in the House and the Senate were discussing a bill that would automatically fund the government if Congress fails to meet its budgetary deadline at the end of the fiscal year. There is more than one plan floating around, but the leading candidate is a bipartisan proposal from Sens. Maggie Hassan, a Democrat from New Hampshire, and James Lankford, a Republican from Oklahoma, that has gained supporters on both sides of the aisle. Their bill would create automatic two-week funding bills once the new fiscal year arrives on October 1, if Congress has failed to act in time. Lawmakers in both chambers would be required to focus only on funding legislation from that point forward. “It’s a longshot, but if passed it would amount to a permanent end to shutdown threats,” Everett says. Supporters of the bill include Democratic Sen. Mark Kelly of Arizona, as well as independent Sens. Kyrsten Sinema of Arizona and Angus King of Maine. Republican Sen. Ron Johnson of Wisconsin said he was willing to end his delay on a group of funding bills earlier this week if he could get a vote on the Lankford-Hassan bill, but that effort went nowhere. Not all lawmakers have embraced the legislation. Some see advantages in the political dynamics of shutdowns, which provide opportunities to push agendas that might otherwise fall by the wayside. And this isn’t the first time lawmakers have tried to fix the shutdown problem through legislation. “Maggie and I’ve been trying to be able to get this on the floor for five years, every time that there was a government shutdown,” Lankford told [Politico](. “Then after the shutdown is over, and we’ve gotten things resolved, people seem to move on to the next topic.” Quote of the Day “The late Sen. John McCain (R-AZ) was fond of paraphrasing the quote attributed to Chairman Mao: it's always darkest...before pitch black. Barring a massive change in trajectory, the U.S. government will (in our minds) shutdown on October 1 when the new fiscal year begins without Congressional funding.” — TD Cowen analyst Chris Kreuger, in a note to clients Friday. “The House threw everything at the wall this week & couldn't pass any governing legislation — left early on Thurs to return next Tues evening,” Kreuger wrote. “House likely to continue digging holes next week for the Senate to fill.” Kreuger added that if a shutdown does occur, it could be a long one given the lack of an “action-forcing policy catalyst” such as the debt ceiling on the calendar in the coming weeks. “The only politically sensitive deadline is Oct 13, when paychecks are due to the military,” he said. Number of the Day: 737,000 If the government shuts down on October 1 due to Congress’s inability to pass a funding bill, the Biden administration plans to furlough an estimated 737,000 public employees, according to an analysis by Government Executive, a news site focused on the inner workings of the federal government. That number could change as the shutdown deadline approaches, says Government Executive’s Eric Katz, as agencies update their plans and strategies for how to deal with the halt in funding. Some departments plan to send most of their employees home, while others hope to keep most of their workers on the job by shuffling funds in their budgets. The Small Business Administration, for example, says it will furlough just 17% of its employees, while the Department of Housing and Urban Development plans to furlough 82%. See a department by department breakdown of furlough estimates at [Government Executive](. --------------------------------------------------------------- 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 - [U.S. Braces for Costly Government Shutdown in Eight Days]( – Washington Post - [Schumer in Talks With McConnell as Shutdown Fears Grow: ‘We May Now Have to Go First’]( – CNN - [McCarthy Hopes to Pass GOP Funding Stopgap Before Shutdown Deadline]( – The Hill - [McCarthy Plans to Give Ukraine Aid Its Own Separate Vote as He Moves Ahead on GOP Spending Bills]( – Politico - [White House Threatens to Veto Two GOP Funding Bills]( – The Hill - [Rep. Lawler: I Didn’t Come to Congress to ‘Play Stupid Games’]( – Politico - [GOP Rep Praises Pelosi When Asked About McCarthy’s Job Security]( – The Hill - [Biden Tries to Seize on GOP Drama With ‘Split-Screen’ Strategy]( – Washington Post - [Senators Seek to Stop Shutdowns Forever, After McCarthy’s Spending Stumbles]( – Politico - [Congress Gets Paid During a Shutdown (Whether They Want to or Not)]( – Politico - [U.S. Will Send Ukraine Long-Range Missiles, After Delay]( – Washington Post - [Feds Sue Anesthesiology Giant Over Alleged Scheme to Hike Prices]( – Washington Post - [Americans Trying to Get New Covid Vaccine Hit Insurance Snags, Face Bills]( – Washington Post - [Ron DeSantis Has a Problem: Covid Vaccine Skepticism Isn’t Moving GOP Voters]( – Politico Views and Analysis - [In a Leaderless House, the ‘Clowns’ Stumble Toward a Shutdown]( – Dana Milbank, Washington Post - [Why There Are No Heroes in This Shutdown Showdown]( – John T. Bennett, Roll Call - [Washington and Wall Street Economists Are in Rare Unison on the Economy’s Prospects. That Could Spell Trouble]( – Sam Sutton, Politico - [Why Prices Are Never Going Back Down]( – Catherine Rampell, Washington Post - [$113 Billion: Where the US Investment in Ukraine Aid Has Gone]( – Zachary B. Wolf, CNN - [Biden Has a Plan B for Student-Loan Forgiveness. The Courts Could Kill It, Too]( – Andrew Restuccia, Wall Street Journal - [It May Not Be Easy to Get the Latest Covid Vaccine]( – Fenit Nirappil, Washington Post - [The Limits of Taxing the Rich]( – Brian Riedl, Manhattan Institute - [Autoworkers Used to Be the Best-Paid Workers in the U.S. What Happened?]( – Andrew Van Dam and Jeanne Whalen, Washington Post Copyright © 2023 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website or through Facebook. 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