Kevin McCarthy

Another Government Shutdown Deadline Approaches

Another federal government shutdown looms unless Congress can pass a spending bill before September 30 over the opposition of the 42-member House Freedom Caucus, which wants to make budget cuts before the November 8 general election.

Another federal government shutdown looms unless Congress can pass a spending bill before September 30 over the opposition of the 42-member House Freedom Caucus, which wants to make budget cuts before the November 8 general election.

If you think the presidential race seems repetitious, think about the prospect of another federal government shutdown. That might just happen on September 30 if Congress can’t pass legislation to fund continuing operations.

This potential shutdown has all the hallmarks of earlier ones – the right-wing faction of the House GOP caucus is balking at a short continuing resolution to push major budget decisions past the November 8 general election when a new president will be elected and Senate control could flip from Republicans to Democrats.

The 42-member Freedom Caucus wants to avoid an omnibus spending package in a lame-duck session of Congress. GOP House leaders, including Majority Leader Kevin McCarthy, have expressed support for approving a continuing resolution this month that would maintain existing spending levels until around Christmas.

If Freedom Caucus members hold firm, House Speaker Paul Ryan will be staring at the same dilemma that bedeviled and ultimately unseated his predecessor, John Boehner – turning to Democrats for the needed votes to approve a spending bill. Democrats have their own priorities and have stymied Republican proposals of late.

House Republicans are huddling to find a work-around after Congress returned earlier this week after a seven-week recess. Preventing a government shutdown is just one of many spending issues up in the air at this point.

Congress left town in July without approving a spending measure to combat the Zika virus, which has emerged as more of a threat in Miami and potentially other parts of the South than previously anticipated.

The presidential contest between Donald Trump and Hillary Clinton is tightening up as the candidates seek to distinguish themselves on a range of issues, including national security, which will be the subject of an NBC-sponsored commander-in-chief forum tonight. Before the event, Trump said he favors releasing the Pentagon budget from the spending constraints that apply across the board to all federal agencies.

Some conservatives in Congress have echoed Trump's view, but they face the problem of what to cut to compensate for higher defense spending. Democrats, including President Obama, oppose selectively excusing defense spending from overall spending constraints.

Congressional Democrats and Obama appear in policy lock-step in support of a short-term spending bill that will push bigger budget questions beyond election day. That position is buttressed by the serious prospect that Democrats could regain control of the Senate though the GOP majority in the Senate hasn’t warmed up to the idea of closing down the federal government.

There is little question the budget priorities of a President Clinton and a President Trump would differ substantially, which makes the looming stalemate over a stopgap continuing resolution even stickier. It also raises the question of whether an actual government shutdown would help or hurt Trump or Clinton.

Trump has positioned himself as a political outsider with the personal experience of knowing how the system works and what needs to change. Clinton has a hard time escaping the “insider” label, but can be expected to argue that now is not the time to threaten or shutter the federal government, given the precarious momentum of the economic recovery and a flurry of foreign threats.

The Freedom Caucus may be wary of Trump in the White House, but they worry more about a Clinton victory in November, combined with a Democratic takeover in the Senate. They may argue now is potentially the last time they have the leverage for major cuts in federal spending and a budget boost for the military. What will be interesting to watch in the next three weeks is whether the Freedom Caucus actually has the leverage it imagines.

Michael Skipper is CFM’s Federal Affairs Associate. Before joining the team in Washington, D.C., Michael worked on state affairs in Oregon, where he also studied political science and environmental policy at OSU. In his free time, Michael enjoys traveling, reading and spending time with friends and family. You can reach him at michaels@cfmpdx.com

Boehner Bombshell Shifts Capitol Landscape

Speaker John Boehner's bombshell resignation announcement shifted the political ground on Capitol Hill, making short-term issues easier to resolve, but creating some longer term obstacles that may be harder to move.

Speaker John Boehner's bombshell resignation announcement shifted the political ground on Capitol Hill, making short-term issues easier to resolve, but creating some longer term obstacles that may be harder to move.

Speaker John Boehner's surprise announcement to retire at the end of October has shifted the landscape on Capitol Hill and may presage an even more dramatic shift later this year.

No longer beholden to the "Freedom Caucus"  – the far right flank of the GOP, Boehner has the flexibility to push more moderate legislation through the House over the next 32 days. The question is, how much can he really get done and what are the short- and long-term implications for the next House Speaker?

In the short-term, the retirement announcement has provided breathing room for the Speaker. The chances of an October 1 government shutdown have nearly evaporated, bipartisan passage of a drama-free debt ceiling bill is more likely and there is hope for a compromise on a transportation/tax reform package. Without the constant threat of a motion to "vacate the Speaker," other bills could hitch a ride on a fast track, including reauthorization of the Export-Import Bank.

Don't get too optimistic. It's also clear the next Speaker will have to deal with the consequences of an unhinged Boehner. Next in line to the Speakership is Boehner friend and ally, Majority Leader Kevin McCarthy from California. The more bipartisan legislation that moves in October, the higher the level of conservative frustration later in the GOP caucus. To be elected Speaker, McCarthy can only lose 29 votes from the GOP ranks – 24 of whom already voted against Boehner in January. Thus, McCarthy can only lose five more Republicans to avoid an all-out scramble for the Speaker's position. 

If McCarthy is tied to the Speaker's actions over the next month, his ascension to Speaker could be put in jeopardy. So Boehner is still going to have to balance the risks and rewards of moving legislation in his final days. Bipartisan action would continue to stoke tensions within the Republican Party and could bring the confrontation past the boiling point to a full revolt. Boehner is a master politician though, so he may manage to clear the decks of some of the most contentious issues and leave the institution he loves on a high note.

Here is some quick analysis on how key provisions could be impacted by the Speaker's departure:

September 30 Budget Showdown/Shutdown – Boehner is no longer beholden to the far right and word from GOP leadership is the Speaker will offer up a clean Continuing Resolution (CR) to keep the government funded through December 11. The CR will not contain the controversial repeal of funding for Planned Parenthood. Without the Planned Parenthood funding repeal, the GOP will lose 30-50 votes for the CR and Republicans will need to rely on Democrats to pass the bill. The measure will likely pass by Wednesday evening, just in time for the September 30 end of fiscal year deadline.

Debt Limit Increase – Another casualty of Boehner's departure could be a showdown over the debt limit. With an historic debt of $19 trillion, the country needs to increase its credit limit once again before it defaults. Unfortunately, the debt limit increase is becoming an annual affair. 

The timeline for default is not exact, but will likely happen in November. It's expected Boehner will try to act before he leaves office to clear the decks for the next Speaker. Typically, the Freedom Caucus has been steadfast in its opposition to raising the debt limit without a dollar-for-dollar cut in spending. The Obama Administration meanwhile has said the debt limit is not a tool for negotiation, even though in 2011, that's how we got the Super Committee and Sequestration. 

Transportation and Tax Reform– The fate of the transportation bill also could benefit. Word out of leadership and the House T&I Committee is that Chairman Bill Shuster and Ways and Means Chairman Paul Ryan have a six-year package that is ready to be unveiled. With the blessing of the Speaker, a transportation/tax reform package could receive an expedited path to the floor of the House. Many Freedom Caucus members have opposed additional federal spending on transportation. October could be the perfect time to get a popular bipartisan bill through the House.

Sequestration Cap – Without another 2013 Murray/Ryan type of agreement, the two-year sequestration relief bill will expire October 1. Both Republicans and Democrats want to lift the cap, but for different reasons. Republicans generally want more defense spending, while Democrats want more non-defense spending. It is hard to be optimistic that the Speaker can reach a deal to lift the spending caps before he leaves. However, there will certainly be pressure on him to expedite negotiations and resolve the issue.

December 11 – The likelihood of a government shutdown on December 11 has gone up significantly. An emboldened Freedom Caucus, a lame duck President Obama and presidential politics are could conspire to make this a tumultuous December. It will take  fancy footwork from both sides to come together on the FY16 spending package.