We Are Climbing Johnson’s Ladder

David Super

      After a volatile summer and fall, federal government fiscal crises have largely fallen out of the news.  This is the result of the “laddered” continuing resolution that new House Speaker Mike Johnson pushed through in mid-November.  His legislation continues funding for four sets of federal agencies through January 19 and the rest of the federal government through February 2.  In theory, this gives Congress more time to resolve funding levels for the current fiscal year.  In fact, precisely the same obstacles that prevented agreement on full-year appropriations earlier continue unabated.  If anything, the likelihood of a long partial government shutdown is higher now than it was in the fall. 

     The legislation President Joe Biden negotiated with House Speaker Kevin McCarthy to avoid breaching the statutory debt limit required serious cuts in appropriated funds for federal operations.  To make the cuts look even deeper than they were – and so to dampen criticism of Speaker McCarthy – President Biden agreed to lower headline numbers partially offset by various technical adjustments that would moderate how much actual spending will fall.    

     Far-right House Republicans nonetheless bitterly criticized this legislation, but it passed on the strength of solid Democratic support.  The House Freedom Caucus soon took its revenge, blocking the leadership of its own party from conducting routine business on the House floor.  Speaker McCarthy could have approached House Democrats for the necessary votes to get the House moving again, but instead he promised the Freedom Caucus he would renege on his deal with the President. 

     Accordingly, the House Appropriations Committee spent the summer and early fall moving bills that radically cut domestic spending in ways that would fundamentally change the role of the federal government.  Seven of these bills they managed to push through the House on party-lines votes, with many Republicans disavowing these bills’ cuts but voting for them nonetheless “to move the process along”.  The other five annual appropriations bills were so extreme that Republican leadership could not muster the votes to pass them. 

     Senate appropriators, meanwhile, worked on a bipartisan basis to report out a complete set of appropriations bills that cut spending to the levels in the Biden-McCarthy agreement.  Far-right senators trying to keep House Republicans from being undercut slowed these bills procedurally on the Senate floor, but their substance retains broad bipartisan support. 

     Knowing that the House appropriations bills’ departure from the Biden-McCarthy agreement – and extreme non-fiscal policy riders – doomed them in the Senate, Speaker McCarthy tried and failed several times to pass a “continuing resolution” (CR) to keep the government open in the new fiscal year.  When he recognized that he could not do so with Republican votes alone, he placed a “clean” CR – one that froze spending at prior years’ levels – on the House floor at the last moment and kept the government open with Democratic votes.  House Republicans promptly ousted him. 

     After weeks of embarrassing failures to replace Speaker McCarthy, House Republicans settled on Louisiana Representative Mike Johnson, with a far-right voting record but a low profile.  After he, too, failed to unite his party around a viable appropriations strategy, he placed another CR on the House floor just before McCarthy’s CR expired.  Speaker Johnson concluded that no CR could pass the House with only Republican votes and that no CR cutting spending below a nominal freeze would garner any Democratic support.  He therefore placed his “laddered” CR on the floor; although Democrats denounced it as gimmicky, the absence of additional nominal-dollar cuts persuaded them to vote for it.  The Freedom Caucus and its allies fiercely criticized Speaker Johnson for allowing a vote on legislation that needed Democratic support to pass. 

     Remaining constant through all this have been the House Freedom Caucus’s insistence on replacing the Biden-McCarthy deal with transformative cuts to domestic spending – and the remainder of the Republican Conference’s unwillingness to oppose them.  Also remaining constant has been House Republicans’ strong aversion to allowing any legislation to reach the floor that would require Democratic vote to pass.  And until one or both of these positions changes, preventing a government shutdown will be impossible. 

     In the nearly one month since Speaker Johnson’s laddered CR passed, House and Senate Appropriators have made essentially no progress on writing full-year appropriations bills.  This is because productive negotiations on legislative details are impossible without agreement on the overall spending constraints the bills must meet.  Democrats are insisting on following the Biden-McCarthy deal.  This position is driven partly by the merits and partly by a recognition that once they acquiesce in Republicans’ breaking one deal, Republicans’ word becomes worthless and future deals impossible.  House Republicans, in turn, continue to insist on transformative domestic spending cuts, either by lowering the headline numbers in the Biden-McCarthy deal or by eliminating the moderating adjustments it authorized. 

     Congress is expected to adjourn for the year shortly.  With neither side having any reason to abandon its position, Congress staying in town would accomplish nothing.  Only the focused public attention that a government shutdown brings will put either side under any significant pressure to change. 

     This suggests that on January 19, the Departments of Agriculture, Energy, Housing and Urban Development, Transportation, and Veterans’ Affairs, along with the Food and Drug Administration, many programs those agencies run, military construction, and water projects will largely shut down.  Unless the shutdown is resolved sooner, the rest of the federal government will follow on February 2. 

     A new issue makes further postponement of these deadlines more difficult.  The debt limit legislation imposes caps on defense and non-defense spending at levels equal to one percent below a nominal freeze of 2023 spending levels if all full-year appropriations acts have not been enacted by January 1.  This would mean a real (inflation-adjusted) cut of five percent across-the-board.  Thus, another CR at the nominal freeze level would be unaffordable.  Reducing domestic spending to this level would be significantly harsher than the Biden-McCarthy cuts.  Setting the defense budget at this level would be dramatically more onerous than the Biden-McCarthy agreement, which largely protected the Pentagon. 

     The combined votes of domestic program supporters and defense hawks likely would prevent a new CR from passing the Senate unless it overrides the additional January 1 cuts.  A CR that fails to override the January 1 cuts also likely would get few Democratic votes in the House.  That likely would leave it short of a majority as several far-right Republicans refuse to vote for CRs.  But a CR that did override the January 1 cuts clearly would need Democratic votes to pass the House, which likely would make Speaker Johnson reluctant to bring it to the floor.  If even “kicking the can down the road” does not work cleanly, a government shutdown will be very difficult to prevent or to end quickly. 

     Further complicating matters is Republicans’ increasing insistence on extracting changes in permanent law as the price for single-year appropriations.  A supplemental appropriation bill for Israel, Ukraine, and border enforcement – which has broad bipartisan support in the Senate on the merits – has been stalled for weeks as Republicans refuse to let it move without permanent, radical changes to immigration law.  These changes could well put the U.S. out of compliance with its international treaty obligations and prevent many people facing foreign persecution from obtaining asylum.  The House appropriations bills similarly contain numerous riders on non-appropriations-related subjects.  Past Congresses scaled down substantive appropriations riders when partisan control was divided.  The House Freedom Caucus and its Senate allies, however, see interdicting appropriations legislation as a key means of forcing through their non-fiscal policy agendas.  As the range of issues in dispute rises, the path to a deal becomes that much more arduous.

     @DavidASuper1