Congress Faces Crunchtime in Fight on Spending Cuts

WASHINGTON—One down, a lot to go.

House Speaker Kevin McCarthy (R., Calif.), who all year has tangled with his party’s hard-line fiscal conservatives, heads into the August recess with the unfinished business of funding the government and only about a dozen legislative days when Congress returns in September.

The House speaker closed out the July work period by steering passage of the first of 12 appropriations bills, a measure funding the Veterans Affairs Department and the construction of military facilities and related housing. Conservative Republicans balked at voting for a planned bill funding the Food and Drug Administration and agricultural priorities, forcing House Republican leaders to pull the bill from the schedule. 

A partial government shutdown would begin Oct. 1 if Congress fails to pass the funding bills.

“September is going to be very busy,” House Majority Leader Steve Scalise (R., La.) told reporters recently. “We will be working through August to get as many agreements as we can, so that when we come back, everybody is going to be buckling up and working hard.”

While shutdown politics have become an annual feature of spending talks, this round promises to be particularly unpredictable. Fiscal conservatives say McCarthy hasn’t done enough to cut spending and have threatened to use their votes to block movement in the House, where McCarthy can afford to lose only a handful of party members because of the GOP’s thin 222-212 majority. Any House bill would then need to be worked out with the Senate, narrowly controlled by Democrats who have called proposed cuts harsh and nonstarters.

Rep. Garret Graves (R., La.), a negotiator for McCarthy, said that the House speaker was trying to accommodate fiscal conservatives’ concerns about total discretionary spending in fiscal 2024, but that he could only make concessions if he could be sure that he wouldn’t lose other necessary votes. 

“All of us are committed to savings that help put this country on a financially sustainable trajectory, but, you know, that 218 margin is obviously really important,” Graves said, referring to the votes needed for a win. “And so just trying to find that right balance is what everybody’s been working on.”

A partial government shutdown would trigger furloughs for hundreds of thousands of government workers, but border security, issuance of benefit checks and other critical functions would continue to operate.

Avoiding a government shutdown is only one of the must-do items before the fiscal year ends Sept. 30. Congress must also reauthorize the Federal Aviation Administration, pass a farm bill and reauthorize the National Flood Insurance Program so that home sales in flood-prone areas can continue. The House is due to return Sept. 12 and has four-day legislative sessions for each of the three weeks before Sept. 30. The Senate is due to return Sept. 5.

The most consequential task is to appropriate money to keep the government running. McCarthy and Senate Majority Leader Chuck Schumer (D., N.Y.) recently met to discuss appropriations bills, but neither would say if they discussed trying to pass at least some individual spending bills by the end of September. 

Another option is to pass a so-called continuing resolution, which keeps the government funded at the prior year’s levels to provide more time past Oct. 1. That move would require nearly universal Republican support, or else McCarthy would have to risk his speakership by relying on Democratic votes to get the bill to the floor for a vote.

In remarks to reporters, McCarthy brushed aside questions about conservatives’ pressure.

“We’re going to do it the same way we’ve done it every single week,” he said. “We bring all the members together, we talk, and we go through committee.”  

At the same time, McCarthy has signaled he is open to starting an impeachment inquiry into President Biden over his son’s business dealings, amid pressure from some far-right members including Rep. Marjorie Taylor Greene (R., Ga.). McCarthy said such an inquiry would give Congress maximum powers to investigate but wouldn’t distract from legislative work. President Biden has denied any connections to Hunter Biden’s

Schumer hasn’t passed any of the 12 appropriations bills through his chamber, but the Senate Appropriations Committee has advanced all of them with large bipartisan margins, agreeing to total discretionary spending of $1.59 trillion as spelled out in this year’s debt-ceiling law.

“We are passing important bipartisan legislation,” Schumer said. “If the House of Representatives would look at how we’re working here in the Senate and emulate us a little more, they could be far more productive.”

On top of that spending, Senate Appropriations Committee Chair Patty Murray (D., Wash.) said that she and the panel’s top Republican, Sen. Susan Collins of Maine, agreed to add $13.7 billion in additional appropriations by classifying $8 billion as “emergency” defense spending and $5.7 billion as “emergency” nondefense spending. Emergency spending isn’t subject to the discretionary spending caps. 

For McCarthy, the root of the problem is that even though he succeeded in enacting a debt-ceiling law with Democrats in June that made small cuts in spending for fiscal 2024, conservatives thought it did too little and aren’t willing to accept his promise that he can make even deeper cuts. They say he has relied on budget trickery that cuts spending for the coming year but doesn’t change the arc of future years.

The House Appropriations Committee agreed to $1.59 trillion in discretionary spending for fiscal 2024, in line with the debt-ceiling levels, but then reduced the cost to $1.471 trillion by taking back money from previously passed programs, which they labeled rescissions. That enabled House Republican leaders to say that they were cutting spending to fiscal 2022 levels, the promise that McCarthy made when he struck the deal earlier this year that elevated him to the speakership.

Hard-line conservatives want House leaders to come up with $115 billion in additional cuts without relying on funds from already approved programs.

“There’s an enormous bloc of us that’s been very clear that we’re not going along with the higher levels, so we’ll see what happens in September,” said Rep. Chip Roy (R., Texas), a chief negotiator on behalf of the House Freedom Caucus, a group of roughly three dozen hard-line conservatives. “All of this would have been a hell of a lot easier if we had set the levels at $1.471 [trillion] without rescissions.”

House Republican leaders have tried to keep conservatives on board by loading up their must-pass bills with social-policy measures, such as adding to the agriculture bill a provision to void an FDA policy allowing patients to obtain mifepristone, a drug used to induce abortion, directly from pharmacies rather than healthcare providers. But that has complicated life for moderate Republicans, including the 18 from districts won by President Biden.

Rep. Mark Amodei (R., Nev.), a member of the House Appropriations Committee, said that conservatives’ demands risked ceding control to the Senate.

“You’ve got to get something off the floor in order to get to the endgame,” Amodei said. “If you don’t get it off the floor, there’s nothing to talk to the Senate about. And by the way, if you think the Senate’s gonna spend less, God bless.”

Write to Siobhan Hughes at [email protected], Lindsay Wise at [email protected] and David Harrison at [email protected]