October 2, 2023: Update on government funding and next steps
The CPC Center will share updates on government funding on an ad hoc basis, with our next update likely coming in mid-November when Congress will reckon with another potential shutdown. If you are interested in learning more about shutdowns in the interim, check out our FAQs about Government Shutdowns and Lessons Learned from Two of the Longest Shutdowns in History.
Background
Funding for the federal government was set to run out on September 30, the last day of the fiscal year, setting up a government shutdown on October 1. Congress did not pass all 12 appropriations (spending) bills needed to fund the government through Fiscal Year (FY) 2024 before this deadline, so both chambers began working on temporary funding bills (CRs) to keep the government running and allow more time to negotiate.
What Happened Last Week?
Last week, the Senate began considering a bipartisan CR to keep the government open until November 17, provide extra funding for disaster relief and Ukraine, and keep certain expiring programs operational. The Senate was on track to pass that CR on October 1. The House attempted to pass its own partisan CR on Friday that would have funded the government through October 31, cut most non-defense spending by about 30 percent, and imposed new draconian immigration restrictions, but it failed with 21 House Republicans joining every Democrat to reject the bill. The Senate and White House would have rejected the House CR, too, but its passage would have made the House Republican majority’s demands for FY 2024 spending clear. Going into the weekend, it was not clear what kind of CR, if any, could pass in the GOP-controlled House without Democratic votes. However, consensus among Hill-watchers and the media was that relying on Democratic votes to pass a CR would prompt Speaker McCarthy’s opponents to attempt to oust him from the speakership (read about the “motion to vacate” that would facilitate this here). As a result, a shutdown seemed all but inevitable.
What Happened on Saturday?
On Saturday morning, Speaker McCarthy unexpectedly unveiled a 47-day CR that largely mirrored the Senate’s bipartisan proposal. It included $16 billion for disaster relief, extended expiring FAA authorities through the end of 2023, and will keep the National Flood Insurance Program, community health centers, Temporary Assistance for Needy Families (TANF), and other key programs operating for the CR’s duration. However, unlike the Senate’s bill, the House CR excluded $6 billion for Ukraine. The original draft of the House CR also would have allowed members of Congress to get a 4.6 percent pay raise, their first since 2009, but this provision was ultimately excluded. The Speaker’s reversal is a tacit acknowledgment of what the CPC Center previously reported in an analysis of past shutdowns: forcing a government shutdown to achieve an unpopular goal—like massive cuts to popular services and programs—is unlikely to succeed in the face of unified opposition, and the party making the unpopular demand shoulders the blame for the shutdown in the public’s eyes. The CR passed the House 335-91, with support from most Republicans and nearly every Democrat. It then passed the Senate 88-9, with every Democrat voting yes, allowing President Biden to sign it into law before midnight and avoiding a shutdown.
What Happens Next?
Without agreement on the 12 spending bills needed to fund the government through September 30, 2024, or another short-term patch, the government will shut down on November 17. The House canceled a planned recess to consider a number of these spending bills, with votes scheduled on the Energy and Water and Legislative Branch funding measures this week. An expected attempt to oust Speaker McCarthy may jeopardize this schedule, which we will provide further analysis on in future emails. So far, the House has passed four of the 12 appropriations bills on a partisan basis. While the Senate has not passed any, it has advanced all 12 out of committee with nearly unanimous votes. A key challenge between now and November 17 will be reaching an agreement between the Senate and House, given the House bills’ massive cuts and partisan “culture war” provisions. Technically, there is sufficient time for both chambers to finish considering the 12 appropriations bills and negotiate a final deal before the CR expires. Practically, this will be very difficult. It requires cooperation from every senator to overcome the chamber’s procedural hurdles. A speakership battle in the House would only exacerbate the timing challenge.
Several key questions will determine how easily—or not—a deal can come together:
Will Speaker McCarthy still control the House, or will a new speaker be in place—and, if so, will that speaker be less inclined to compromise with Democrats to fund the government? If so, a deal will be harder to reach.
Will House Republicans insist on new immigration-related funding and/or policies, and will Democrats agree to any such provisions? As a reminder, the White House recently asked Congress to provide additional funding for immigration enforcement, suggesting that they are willing to negotiate on this matter. However, it is hard to forecast where most congressional Democrats will land without knowing the deal’s precise parameters.
Will Congress approve more funding for Ukraine separately? On Saturday night, Senate Majority Leader Schumer put a House-passed Ukraine funding bill on the Senate’s calendar. If Congress advances additional Ukraine aid before the CR expires, it will satisfy a key priority for the White House and senators from both parties and remove what could otherwise be a barrier to an eventual funding deal, given numerous House Republicans’ opposition to more Ukraine assistance.