The Congressional Budget Wars Are Coming Back

If you thought the partisan budget wars were over for this year, think again.

The fiscal year ends Sept. 30, and without passage of the necessary appropriations bills, the U.S. government will lack the legal authority to spend money on discretionary activities—functions that require annual appropriations. This doesn’t include Social Security, Medicare and other entitlements. Those checks will continue. But an array of government services ranging from food inspections to national parks won’t be funded without the passage of these bills.

Shutting down or curtailing these services doesn’t present as monumental an economic challenge as May’s debt-ceiling battle. Default then could have caused a global financial crisis. Even the near miss tagged the U.S. government with a credit-rating downgrade. Nonetheless, a government shutdown would inconvenience tens of millions of Americans and take a bite out of economic growth as the Fed tries to engineer a soft landing.

But wasn’t the incipient fight over the fiscal 2024 budget settled months ago, as part of President Biden’s and Speaker Kevin McCarthy’s debt-ceiling deal? Apparently not. That deal set discretionary spending for fiscal 2024 at $1.59 trillion, and Mr. McCarthy proclaimed victory. But the House Appropriations Committee, in open revolt against the speaker, subsequently cut that number to $1.47 trillion—fiscal 2022’s spending level—despite two years of inflation.

The Freedom Caucus and other MAGA Republicans argue that Mr. McCarthy agreed to the lower figure as part of the January deal that gave him the gavel. So the real budget battle this time around may be less between Democrats and Republicans and more between Mr. McCarthy and recalcitrant members of his caucus. The razor-thin Republican majority in the House means he can’t afford to lose many votes.

What happens after Sept. 30 if there is no budget deal? Normally, there is enough good will in Congress—it doesn’t take much—to pass one or more continuing resolutions that maintain existing levels of spending for a few days or weeks while members negotiate. Continuing resolutions have become the norm in recent decades, as Congress rarely finishes the budget by Sept. 30. The fiscal 2001 budget set the record with 21 continuing resolutions but they were all short. In fiscal 2007, 2011 and 2013, Congress never passed a real budget. It was continuing resolutions for the entire year.

What will likely happen this year? Some pertinent facts: The House is set to return Sept. 12, and there are only 12 legislative days scheduled for the month. By coincidence, 12 separate appropriations bills must pass both the House and the Senate and then be signed by the president by month’s end. A bill a day is much faster than Congress’s normal speed, even on a good day. And these won’t be good days.

The Senate looks OK. The House is the hurdle. It passed one of the 12 bills before the August recess, but the White House threatens a veto. Worse, some Freedom Caucus members and MAGA Republicans seem to relish shutting down parts of the government and say they won’t support even a short continuing resolution.

Rep. Bob Good (R., Va.), who never voted in favor of Mr. McCarthy for speaker, declared: “We should not fear a government shutdown. Most of the American people won’t even miss it if the government is shut down temporarily.” And then there are the likes of Reps. Marjorie Taylor Greene and Lauren Boebert,

So the odds aren’t good that Congress will avoid a government shutdown this fall. If there is no continuing resolution by Oct. 1, the Office of Management and Budget will inform everyone which services are essential, like the military, and which are nonessential, like the national parks. So don’t book an October trip to the Grand Canyon. Soon thereafter, Mr. Good and his colleagues will find out whether Americans miss their government. If history is a guide, they eventually will relent.

But will history be a guide this time? Mr. McCarthy will almost certainly need Democratic votes to pass a continuing resolution—not to mention a series of them—through the House, just as he did to raise the debt ceiling. He can get those votes, but would that cost him the speaker’s gavel? You can bet he’s wondering.

Mr. Blinder, a professor of economics and public affairs at Princeton, served as vice chairman of the Federal Reserve, 1994-96, and is the author of “A Monetary and Fiscal History of the United States, 1961-2021.”