Monday, July 24, 2023

Careening Towards a Government Shutdown

David Super

      We are still more than two months away from the end of the federal fiscal year on October 1, yet imagining a way to avoid a partial government shutdown is getting extremely difficult.  The House and Senate are hurdling in opposite directions, and numerous Members of the House Freedom Caucus are openly reveling in the prospect of a government shutdown.  And with both sides feeling burned from this Spring’s deal to raise the debt limit, no easy path toward resolution appears available.  Not just a shutdown, but a rather long one, seems likely.  And however it ends could leave lasting changes in how legislation is enacted. 

     The Freedom Caucus, which vehemently objected to the levels of discretionary spending Speaker McCarthy agreed to in the debt limit deal, has been demanding that he break that deal.  To show that they mean business, they shut down the House over an unrelated, political messaging bill until the Speaker agreed once again to do their bidding.   

     This has meant having the House Appropriations Committee writing spending bills far below the agreed-upon levels.  Rounding up even Republican votes for spending bills requiring such deep cuts in services would be difficult.  The Appropriations Committee therefore has sought to cushion these cuts by rescinding large amounts of money for carbon emissions reductions from last year’s Inflation Reduction Act (IRA).  Further, the House Appropriations Committee has added numerous policy riders wholly unacceptable to Democrats (e.g., barring aid to LGBTQ community centers and prohibiting over-the-counter abortion drugs). 

     Although Republican Members in competitive districts have expressed unease at the funding levels, the IRA rescissions, and some of the policy riders, so far they have fallen into line and voted for the bills.  This week, the Speaker plans to bring the floor two of these bills:  the Agriculture Appropriations bill (which appears to lack sufficient funding to avoid eligibility cuts in the Special Supplemental Nutrition Program for Women, Infants and Children (WIC)) and the Military Construction/Veterans’ Affairs bill (which skimps on several politically sensitive programs).  We could see endangered Republicans finally push back, but it seems far more likely that instead Freedom Caucus Members will insist on even more extreme policy riders and the rest of the caucus will acquiesce. 

     At the same time, the Senate Appropriations Committee is moving forward on a bipartisan basis with bills that match the spending levels in the debt limit deal.  This requires some significant cuts, but nothing like the draconian House proposals.  The Committee’s leadership also has proposed to set aside more than $13 billion for emergency funding that, under budget process law, is not subject to the caps on discretionary spending.  Some of this likely would be spent on aid to Ukraine and responding to extreme weather events in the U.S. 

     With August recess approaching, everyone recognizes that neither chamber will come close to finishing its appropriations bills, much less resolving the differences between them in a House-Senate conference committee, by Sep­tember 30.  In a normal year, this would lead to a short-term continuing resolution (CR) to keep the government funded at the prior year’s levels (unadjusted for inflation) for a few weeks to allow Congress to finish its work. 

     This year, however, the House Freedom Caucus is demanding that any CR impose a one percent across-the-board spending reduction.  Some Freedom Caucus Members are suggesting that, as a partial government shutdown looms, they should raise the price of their assent to a short-term CR with either deeper cuts or policy riders.  They clearly believe that the rest of Congress is panicky about a partial government shutdown and that this gives them leverage to achieve a large part of their agenda. 

     Yet it is far from clear that Democrats would be willing to break precedent and accept a CR making nominal cuts in spending levels.  Defense hawks, too, are unhappy about across-the-board cuts because they won caps on Pentagon spending in the debt limit deal that are much more generous than those for domestic programs.  More broadly, nobody has much incentive to make concessions to get a CR with such dismal prospects of agreement on year-long appropriations when the CR ends.  If we are going to have a partial government shutdown anyway, many would say, we might as well get it over with. 

     Superficially, this government shutdown would be among the very easiest to resolve:  the two sides already have an agreement.  The parties simply need to take the Senate appropriation bills (which conform to the agreement the parties reached in May) and reallocate funds within them to reflect a compromise between House and Senate programmatic priorities.  But the House Freedom Caucus does not feel bound by that deal, and the Speaker feels more bound to please the House Freedom Caucus than he does to honor his deal with the President. 

     The ultimate resolution of the government shutdown could take any of several forms.  If public opinion turns sharply against the Republicans, Speaker McCarthy (likely under strong behind-the-scenes pressure from Senate Republican Leader McConnell) could bring to the House floor a spending bill that essentially conforms to the debt limit deal.  If he did, it would surely have more than enough Democratic and Republican votes to pass even with fierce Freedom Caucus opposition.  That, however, would lead the Freedom Caucus to shut down the House again, likely for longer than it did this summer.  The House has little pressing business this year after it finishes the spending bills, so perhaps being shut down would be tolerable. 

     If Speaker McCarthy decides to stand by the Freedom Caucus, Democrats could file a bill conforming to the debt limit deal (or simply the Senate appropriations bills) with a rule to bring that legislation to the floor and then seek 218 Members’ signatures on a discharge petition.  That would require obtaining the signatures of four House Republicans.  If the partial government shutdown is polling very badly and their seats are looking quite vulnerable, perhaps four would sign the discharge petition and then vote for the bill.  The Freedom Caucus, however, would then demand that these “RINOs” be stripped of their committee assignments and cut off from the Party’s support during likely primary challenges.  Few Members will be so sure they are doomed in the general election that they will subject themselves to brutal primaries and the loss of all privileges within the House.  This is why, to date, every supposed “rebellion of the moderates” has proven to be so much sound and fury signifying nothing.  Few Members of Congress are willing to be but a walking shadow, a poor player that struts and frets their hour upon the stage and then is heard no more. 

     If polling goes against the Democrats, they could concede to some of the Freedom Caucus’s demands.  Quite apart from their views on the substance, however, they have strong institutional reasons not to do so even if the government shutdown is causing great practical and political damage.  Repeat players cannot allow their counterparts to disregard deals that they have made.  Speaker McCarthy knew the Freedom Caucus would be enraged when he made the debt limit agreement; if Democrats allow him to disregard that deal, the same thing will keep happening because the Freedom Caucus has no shortage of rage and the Speaker has no shortage of fear.  So Democrats are wildly unlikely to give significant ground. 

     More dramatically, the partial government shutdown could lead to a procedural re-alignment in the House.  Speaker McCarthy could make a deal with Democrats not to bring legislation to the floor under abusive, one-sided rules (something every speaker, Democratic and Republican, has done since time immemorial).  And in return, the Democrats could promise to supply the votes to allow legislation to reach the floor (even if they later vote against that legislation on the merits) and to abstain in any vote to declare the Speaker’s chair vacant.  That would not by any means be a coalition government:  Speaker McCarthy and his majority would continue to pursue, and mostly pass, far-right initiatives.  But Democrats would get up-or-down votes on their proposals, too, and no one faction could lock down the House.  And the partial government shutdown would end.

     Finally, the government shutdown might not end in legislation at all.  The Fiscal Control Act that raised the debt limit also provided that an automatic CR would take effect January 1 if Congress has not enacted all twelve annual appropriations bills by that time.  The automatic CR would give every program 99% of the funding it received in fiscal year 2023.  For non-defense programs as a group, that would be dramatically better than what the House Republican appropriations bills offer; for Defense, that would be meaningfully worse.  If it becomes clear that no comprehensive deal is possible, the parties might agree on relatively minor shifts of funding within each category. 

     Whether the Speaker directly defies the Freedom Caucus, a few endangered Republicans break ranks to sign a discharge petition, the Democrats acquiesce in the principle that the Speaker is not bound by his own deals, or the mechanics of controlling the House floor change, this government shutdown will significantly change the way we do politics in this country, possibly for a long time.  With the Freedom Caucus feeling betrayed and heavily dug in, a more mundane resolution to the shutdown seems improbable unless Congress simply allows the automatic CR to take effect.  And Congress passing no particularized appropriations bills for a year would also be a sharp break with precedent – and a likely if unfortunate model for future years.   

     Partial government shutdowns are bad for almost everyone except attention-seeking House Freedom Caucus Members (and perhaps a law professor preparing to submit an article on Preventing Fiscal Calamity to the law journals).  But this shutdown seems very nearly inevitable.


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