November 7: Update on Avoiding a Pre-Thanksgiving Government Shutdown

There are just 10 days before government funding expires on Friday, November 17. As such, the CPC Center will resume our updates around a potential shutdown, the current state of play, and where things may go from here. We will share these updates on an ad hoc basis. Please feel free to forward these emails and share any feedback. 

What are the options to avoid a shutdown? 

The first option is another stopgap, no strings attached. Congress will not finish all 12 FY2024 spending bills before next Friday. The only way to avoid a shutdown is via another continuing resolution (CR), buying more time to complete those bills. Typically, this is a tough sell for anti-CR House Republicans. However, several have signaled they’re willing to cooperate and save Speaker Johnson a shutdown in his first month on the job. The new Speaker has said he wants to avoid the now-routine pre-Christmas spending package and approve a CR through January 15 or April 15.

As a reminder, this summer’s debt ceiling deal forces 1 percent cuts to defense and nondefense discretionary spending caps if a CR is in place on January 1. If a CR goes through April 30, that 1 percent cut is formally sequestered for the whole year. Theoretically, the threat of these automatic cuts will compel Congress to pass full-year spending bills. However, if history is any indication, it’s more likely those cuts will go through in some form or Congress will postpone them. As a reminder, the Budget Control Act (BCA) of 2011 set up a sequestration mechanism to enforce caps on discretionary spending between FY2012 and FY2021, but Congress repeatedly postponed BCA enforcement or boosted its prescribed spending caps. Regardless, the potential for new cuts makes the end date for any CR especially significant.  

The second option is another stopgap, with strings. House Republicans could propose a stopgap with significant spending cuts, as they did in September. According to the White House, that proposal would have taken child care from 65,000 kids, cut off meals to 60,000 older Americans, allowed more than 300 pounds of fentanyl to enter the U.S. and much more. The Senate and White House would almost certainly reject this option.

Speaker Johnson has discussed another approach he calls a “laddered CR.” While he hasn’t offered many details, this would set different deadlines for different appropriations bills. On Monday, Johnson proposed a package of four less controversial spending bills expiring December 7 with the other eight  expiring January 19. Some lawmakers appear highly skeptical, given that it could result in staggered shutdowns for different parts of the federal government. 

What about the White House’s emergency funding requests?

President Biden has asked Congress for two emergency funding packages: 1) $106 billion for Ukraine, Israel, Taiwan, the U.S. border, and other “national security” needs, and 2) $56 billion for domestic disaster aid, child care, broadband, and more. 

Congress has only acted on part of the first request. Last week, the House passed $14 billion for Israel, paired with IRS cuts that would increase the deficit by $12.5 billion rather than offset the spending, due to the agency’s diminished ability to enforce tax laws. Even including an “offset” was unusual for emergency funding, which is exempt from spending caps. Almost every House Democrat opposed the measure, which President Biden threatened to veto.

In the Senate, a group of Republicans have proposed immigration policy changes—not just extra funding—in exchange for the Ukraine, Israel, et al. package. Reporting last week indicated the White House and some Senate Democrats were open to such changes, prompting a statement of “strong opposition” from the heads of the Congressional Black Caucus, Congressional Hispanic Caucus, Congressional Asian Pacific American Caucus, and Congressional Progressive Caucus. This suggests such a trade-off might not garner sufficient support to pass. 

Bottom line: any stopgap measure to keep the government open post-November 17 could include some or all of the President’s domestic and international supplemental requests. Whether it will, though, remains unclear given Congress’ limited progress on these asks.